Author:
Aluchna Maria,Mahadeo Jyoti Devi,Kamiński Bogumił
Abstract
Purpose
The purpose of the paper is to advance the understanding of the links between the presence of independent directors (IDs) on boards and the company value in the specific context of concentrated ownership. The authors apply the framework of agency theory to identify the monitoring effect of IDs in two legal systems – common law and civil law.
Design/methodology/approach
The authors test formulated hypotheses using a unique sample of 50 Mauritian and Polish companies listed during the years 2007 to 2015, amounting to a total of 394 observations adopting the fixed effect panel model.
Findings
The results of the panel model show a negative relationship between independent directors on boards and company value. Specifically, the effect remains negative for companies operating in the civil law system, whereas the stronger protection offered by common law offsets the effect of concentrated ownership, resulting in a non-correlation between independent directors on board and firm value.
Originality/value
This study expands the understanding of the value added by independent directors, addressing their monitoring role in the unfavorable context of concentrated ownership. It also reveals that different legal frameworks of civil law and common law may impact the monitoring performed by independent directors.
Subject
Business, Management and Accounting (miscellaneous)
Cited by
19 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献