Corporate Performance: Does Board Independence Matter? Indian Evidence
International Journal of Organizational Analysis, 26(1), 185-200
Posted: 6 Nov 2013 Last revised: 24 Sep 2018
Date Written: January 4, 2018
This paper attempts to examine the efficacy of the presence of independent board directors on financial performance in India.The study utilised panel regression models on large listed Indian firms to investigate the impact on financial performance due to the presence of independent directors.The findings suggest that independent board directors in Indian contexts do not significantly affect financial performance.The study has implications for the formulation of regulation related to appointment of independent directors and the extent of their representation on the board for them to be effective. The proportion of independent directors on the board of the firm is influenced by the trade-off between the cost of having independent directors on the board versus the benefits to the firm and society. Impact of independent director on financial performance in highly concentrated ownership remains ambiguous.
Keywords: Corporate Governance, Board Independence, Financial Performance, India
JEL Classification: G30, M40
Suggested Citation: Suggested Citation