A One-Size-Fits-All Approach to Corporate Governance Codes and Compliance by Smaller Listed Firms: An Examination of Companies Listed in Hong Kong and Singapore
29 Pages Posted: 13 Mar 2019
Date Written: January 1, 2019
This article examines the impact of a “one-size-fits-all” corporate governance code on smaller listed firms, which should have fewer resources to hire more qualified independent directors for their boards and board committees. After examining data from a sample of companies listed in Hong Kong and Singapore, we find some limited support for these resources-based arguments. While smaller firms do not necessarily have a lower proportion of independent directors, some evidence suggests that smaller firms do pay less to independent directors and that these directors have to serve on multiple board committees. Although many larger firms also share the problem of overloading their independent directors, the ability to find and attract qualified candidates certainly differs with the availability of resources. Therefore, this article suggests that policymakers consider the merit of raising board independence standards and increasing board committee requirements and find ways to assist smaller firms in hiring qualified (but less expensive) independent directors.
Keywords: corporate governance; smaller listed companies; Singapore; Hong Kong; board independence; audit committee; remuneration
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