The effect of board and chairperson independence: an examination of CEO dismissal in Australia

Q4 Economics, Econometrics and Finance

International Journal of Accounting, Auditing and Performance Evaluation Pub Date : 2015-05-12 DOI:10.1504/IJAAPE.2015.068867

Will Mackay, Y. Shan, B. Howieson

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Abstract

The purpose of the paper is to examine the effectiveness of board and chairperson independence as a corporate governance mechanism. We examine 4,637 Australian firms over the period 2004 to 2008. The study presents a multinomial model of CEO dismissal. Our results indicate that independent chairpersons alone are not sufficient to discipline CEOs by dismissal, whereas independent boards are more likely to dismiss a CEO than non-independent boards. We also find that the impact of independent boards becomes more pronounced when independent boards are accompanied by independent chairpersons. The findings imply that board independence and chairperson independence can be powerful corporate governance tools the effects of which are greater if both board and chairperson are independent. These findings support the efforts by the ASX and other regulators to implement independence principles with respect to the disciplining of senior management. This study provides an initial empirical examination of the joint relationship of board and chairperson independence in an Australian context.

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董事会和董事长独立性的影响:对澳大利亚CEO解聘的考察

本文的目的是考察董事会和董事长独立性作为一种公司治理机制的有效性。我们研究了2004年至2008年期间的4,637家澳大利亚公司。本研究提出了一个CEO离职的多项模型。我们的研究结果表明，独立董事长本身不足以通过解雇来约束CEO，而独立董事会比非独立董事会更有可能解雇CEO。我们还发现，当独立董事会与独立主席相伴时，独立董事会的影响更加明显。研究结果表明，董事会独立性和董事长独立性可以成为强有力的公司治理工具，如果董事会和董事长都是独立的，其效果更大。这些发现支持澳大利亚证券交易所和其他监管机构在高级管理层纪律方面实施独立原则的努力。本研究提供了在澳大利亚背景下董事会和主席独立性联合关系的初步实证检验。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Accounting, Auditing and Performance Evaluation Economics, Econometrics and Finance-Finance

CiteScore

0.70

自引率

0.00%

发文量

期刊介绍： IJAAPE publishes original scholarly papers across the whole spectrum of: financial accounting, managerial accounting, accounting education, auditing, taxation, public sector accounting, capital market and accounting, accounting information systems, performance evaluation, corporate governance, ethics, and financial management. All methodologies, such as analytical, empirical, behavioural, surveys, and case studies are welcome. IJAAPE encourages contributions especially from emerging markets and economies in transition and studies whose results are applicable across nation states or capable of being adapted to the different accounting and business environments.