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Do Independent Directors Add Value?
Author(s) -
Matolcsy Zoltan,
Stokes Donald,
Wright Anna
Publication year - 2004
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.2004.tb00281.x
Subject(s) - accounting , corporate governance , business , stock exchange , value (mathematics) , enterprise value , annual report , finance , statistics , mathematics
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.