Corporate board and board committee independence,firm performance,and family ownership concentration: An analysis based on Hong Kong firms |
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Institution: | 1. City University of Hong Kong, Hong Kong;2. The University of Adelaide, Australia;3. Rutgers University, United States;1. Department of Accounting, National Taiwan University, No. 1, Sec. 4, Roosevelt Road, Taipei 106, Taiwan;2. National Taiwan University, Taiwan;3. Graduate Institute of Accounting, National Chung Hsing University, Taiwan;1. University of Central Lancashire (Cyprus), 12-14 University Avenue, Pyla, 7080 Larnaka, Cyprus;2. Department of Commerce, Finance and Shipping, Cyprus University of Technology, P.O. Box 50329, 3603 Limassol, Cyprus;1. University of Salamanca, Spain;2. University of Granada, Spain |
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Abstract: | This study examines whether the relationship between corporate board and board committee independence and firm performance is moderated by the concentration of family ownership. Based on a sample of Hong Kong firms, we find no significant association between the independence of corporate boards or board committees and firm performance in family firms, whereas board independence is positively associated with firm performance in non-family firms. Additionally, our findings show that the proportion of independent directors on the corporate boards of family firms is lower than that of non-family firms, but we find no significant difference in the representation of independent directors on the key committees of corporate boards between family and non-family firms. Overall, these results suggest that the “one size fits all” approach required by the regulatory authorities for appointing independent directors on corporate boards may not necessarily enhance firm performance, especially for family firms. Thus, the requirement to appoint independent directors to the corporate boards of family firms needs to be reconsidered. |
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Keywords: | Family firms Board independence Committee independence Firm performance |
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