Board independence : the product of firm- specific characteristics

Jobbins, Caroline. (1998). Board independence : the product of firm- specific characteristics Honours Thesis, Dept. of Commerce, University of Queensland.

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Author Jobbins, Caroline.
Thesis Title Board independence : the product of firm- specific characteristics
School, Centre or Institute Dept. of Commerce
Institution University of Queensland
Publication date 1998
Thesis type Honours Thesis
Total pages 106
Language eng
Subjects 15 Commerce, Management, Tourism and Services
Formatted abstract
The objective of this thesis is to investigate firm-specific characteristics that explain the level of board independence observed in different companies. Six specific determinants of board independence are identified and tested using Pearson product moment correlations and Ordinary Least Squares regression. The sample is drawn from Australia's Top 500 companies as at 30 June 1996. The proportion of firm value attributable to growth options was found positively related to the level of board independence suggesting that firms' investment opportunity sets influence board composition and structure. To the extent that size reflects the political visibility of a firm, the results suggest that more politically visible firms have higher levels of observed board independence. The study's results provide evidence of substitution between independent board monitoring and the alternate governance mechanisms of (1) insider ownership and (2) large shareholder monitoring. Debt and board independence were found to be complementary governance mechanisms. Further investigation of the relation between the level of operating uncertainty and observed board independence is recommended in light of the inconclusive results obtained for this hypothesis. The research findings of this thesis have implications for future corporate governance research and for regulatory and business entities in developing and implementing corporate governance guidelines.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
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Created: Wed, 27 Oct 2010, 12:26:53 EST by Muhammad Noman Ali on behalf of The University of Queensland Library