UM E-Theses Collection (澳門大學電子學位論文庫)
Title
Independent directors and firm extreme risk : empirical evidence
English Abstract
This paper examines the efficacy of independent directors in the constraint of firms’ stock return extreme downside risk. We find a significantly negative relation between independence of the board and subsequent firm-specific extreme downside risk in the equity market, implying that independent directors work to monitor and mitigate extraordinary risk of the firm. Moreover, longer tenure and larger numbers of companies served by independent directors enhance this extreme downside risk-decreasing effect, suggesting more familiarity with firm operation and expertise in relevant business help independent directors provide better monitoring and advising services. The results are robust to the influences of conventional firm-level risk characters including size, book-to-market ratio, leverage, and momentum. Our findings suggest that well-functioned independent directors are beneficial to shareholders in terms of avoiding stock plumps, and upholding the independent role and fiduciary duty sufficient firm information and good capability obtained by independent directors are a boost to such effect.
Issue Date
2012
Author
Zhang, Jing
Faculty
Faculty of Business Administration
Department:
Department of Finance and Business Economics
Degree
M.B.A.
Subject
Banking and Finance -- Department of Finance and Business Economics
Risk management



Supervisor
Wu Feng
Library URL
b2749590
Files In This Item:
TOC & Abstract
Full-text
Location
1/F Zone C
Supervisor
--