Remote Board Meetings and Board Monitoring Effectiveness: Evidence from China

61 Pages Posted: 19 Sep 2019

See all articles by Xinni Cai

Xinni Cai

Renmin University of China - School of Business

Fuxiu Jiang

Renmin University of China - School of Business

Jun-Koo Kang

Nanyang Technological University (NTU) - Nanyang Business School

Date Written: September 9, 2019

Abstract

Using unique data on board meeting types of Chinese firms, we examine the effect of remote board meetings on board monitoring effectiveness. We find that compared to face-to-face meetings, remote meetings are associated with better meeting attendance behavior of directors, higher likelihood of director dissent on monitoring-related proposals, higher forced CEO turnover-performance sensitivity, and more effective investments. Proposal-director-level analysis further shows that remote meetings increase (reduce) dissension incentives of busy and young directors (first-term and socially connected directors). The results suggest that remote meetings improve board monitoring effectiveness by facilitating status equalization among directors and alleviating their pressure for conformity.

Keywords: Remote meeting, Face-to-face meeting, Independent director, Monitoring effectiveness, Dissent vote, Forced CEO turnover, M&A

JEL Classification: G14, G30, G32, G34

Suggested Citation

Cai, Xinni and Jiang, Fuxiu and Kang, Jun-Koo, Remote Board Meetings and Board Monitoring Effectiveness: Evidence from China (September 9, 2019). Available at SSRN: https://ssrn.com/abstract=3450328 or http://dx.doi.org/10.2139/ssrn.3450328

Xinni Cai (Contact Author)

Renmin University of China - School of Business ( email )

Beijing, Beijing 100872
China

Fuxiu Jiang

Renmin University of China - School of Business ( email )

Beijing
China

Jun-Koo Kang

Nanyang Technological University (NTU) - Nanyang Business School ( email )

Nanyang Avenue, Block S3-01b-54
Singapore, 639798
Singapore
(+65) 6790-5662 (Phone)
(+65) 6791-3697 (Fax)

HOME PAGE: http://www.nbs.ntu.edu.sg/nbs_corporate/divisions/bnf/index.asp

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