Voluntary appointment of independent directors in taiwan: Motives and consequences

Chaur Shiuh Young, Liu Ching Tsai, Pei Gin Hsieh

Research output: Contribution to journalArticlepeer-review

35 Citations (Scopus)


This study explores factors that motivate firms to increase board independence in the absence of legal requirements to do so. In addition, we examine the impact of voluntary enhancement of board independence on firm performance. Using a sample of listed companies in Taiwan, we show that voluntary appointment of independent directors is associated with both economic factors and managerial power. Specifically, we find that board independence increases with the weaknesses of alternative corporate governance mechanisms and the severity of agency problems. However, board independence decreases with managerial ownership and family control. In addition, by employing a simultaneous equations model with selectivity, we provide evidence supporting the positive performance impact of voluntary appointment of independent directors in Taiwan.

Original languageEnglish
Pages (from-to)1103-1137
Number of pages35
JournalJournal of Business Finance and Accounting
Issue number9-10
Publication statusPublished - 2008 Nov

All Science Journal Classification (ASJC) codes

  • Accounting
  • Business, Management and Accounting (miscellaneous)
  • Finance


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