Do remote meetings and board hierarchy impact the voting behavior of independent board directors?

Abstract

Drawing on a comprehensive sample of board meetings from Chinese listed companies between 2005 and 2022, this study systematically investigates the impact of remote board meetings on the voting behavior of independent directors. The findings indicate that, relative to traditional face-to-face meetings, remote meetings significantly increase the likelihood of independent directors expressing dissent. Further analysis of the underlying mechanisms reveals that remote meetings foster dissenting behavior by reducing independent directors' perceived power distance and enhancing their diligence in fulfilling their duties. Additionally, the effect of remote meetings on dissenting behavior is more pronounced in companies with greater board-level hierarchical divergence, characterized by lower independent director compensation, greater internal pay disparity, weaker informal hierarchies, and higher board shareholding. Finally, remote board meetings also have a spillover effect, improving the diligence of independent directors in other boards where they hold concurrent directorships.