- Title
- Independent directors and firm financial performance of H-share companies in Hong Kong
- Creator
- Wong, Stanley Y. F.
- Resource Type
- thesis
- Date
- 2014
- Description
- Professional Doctorate - Doctor of Business Administration (DBA)
- Description
- The aim of this research is to examine the relationship between board independence and firm financial performance found in the sample of 109 H-share companies in Hong Kong from 2008 to 2010. The objective of this study is to gain a better understanding on whether there is a relationship between board independence and firm performance measured by return on equity, Tobin‟s Q and price-to-book ratio. This is undertaken by considering the impact on performance of: percentage of independent directors, leadership structure in terms of CEO duality, and board composition in terms of board age, board size and gender diversity. The results show that the H-share company‟s market value is positively and significantly associated with the percentage of independent directors. The results support the proposition that the age of directors is positively and significantly related to both company profitability and market value. This implies that companies with a higher percentage of independent directors and higher director ages are associated with higher market values. Board size is shown to be positively and significantly correlated to profitability, but is negatively and significantly associated with market value. This implies that companies with higher director ages and larger board size are associated with higher profitability. This result indicates that investors should be concerned with the number of independent directors and board size of H-share companies in Hong Kong. As one of the mechanisms of corporate governance, the independent director system does not completely improve corporate governance and the interests of minority shareholders in H-share companies. However, investors equate the increase in the number of independent directors with market value. To protect all shareholder interests, the regulators of Hong Kong need to seek a governance system that addresses the deficiencies of the independent director system. This research highlights the policy issue of which board attributes concern most investors in the case of H-share companies.
- Subject
- corporate governance; independent directors; financial performance
- Identifier
- http://hdl.handle.net/1959.13/1049313
- Identifier
- uon:15018
- Rights
- Copyright 2014 Stanley Y. F. Wong
- Language
- eng
- Full Text
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