Are East Asian Companies Benefiting from Western Board Practices? |
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Authors: | John Nowland |
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Institution: | (1) School of Economics & Finance, Queensland University of Technology, GPO Box 2434, Brisbane, 4001, Australia |
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Abstract: | Since the Asian crisis, East Asian nations have strived to introduce corporate governance codes, directing companies how to
best improve their corporate governance practices. However, these codes have not been universally accepted by East Asian companies.
This study examines the adoption of major board-related corporate governance recommendations by large non-financial companies
in seven East Asian nations and investigates whether improvements in these board governance mechanisms have been associated
with increased operating performance and market value. The results indicate that family-owned companies started with worse
board governance and have been least likely to improve their board governance since the crisis. Overall, bigger, faster growing,
non-family-owned companies with less concentrated ownership have been more likely to improve their board governance. Splitting
of the positions of Chairman and CEO, creation of audit and nomination committees and improvements in overall board governance
were found to have a positive relationship with subsequent operating performance and/or market value.
John Nowland is a Finance Lecturer at Queensland University of Technology in Australia. He holds a research masters degree
and is completing his PhD at the University of Queensland. His current research focuses on corporate governance and capital
markets in Asia. |
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Keywords: | board committees board independence corporate governance East Asia |
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