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Do Independent Directors Add Value?

Do Independent Directors Add Value? The Australian Stock Exchange's Principles of Good Corporate Governance and Best Practice Recommendations require all listed companies that do not have a majority of independent directors to explain their reasons. We show that independent (outside) directors seem to add value only where their firms have substantial amounts invested in growth options. In these circumstances, outside directors add significant value in their first year on the board and where they have at least three other board positions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Australian Accounting Review Wiley

Do Independent Directors Add Value?

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Publisher
Wiley
Copyright
© 2004 CPA Australia
ISSN
1035-6908
eISSN
1835-2561
DOI
10.1111/j.1835-2561.2004.tb00281.x
Publisher site
See Article on Publisher Site

Abstract

The Australian Stock Exchange's Principles of Good Corporate Governance and Best Practice Recommendations require all listed companies that do not have a majority of independent directors to explain their reasons. We show that independent (outside) directors seem to add value only where their firms have substantial amounts invested in growth options. In these circumstances, outside directors add significant value in their first year on the board and where they have at least three other board positions.

Journal

Australian Accounting Review – Wiley

Published: Mar 1, 2004

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