Do independent directors add value?

Publication Type:
Journal Article
Australian Accounting Review, 2004, 14 (32), pp. 33 - 40
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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. © 2004 CPA Australia.
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