Board independence and managerial authority
Purpose The imposition of the Sarbanes Oxley Act and the NYSE/NASDAQ regulations boosted the proportion of independent directors serving on corporate boards. For certain firms, increasing the number of independent directors may impose costs that exceed the benefits. This paper examines the implicati...
محفوظ في:
| المؤلف الرئيسي: | |
|---|---|
| مؤلفون آخرون: | , |
| التنسيق: | article |
| منشور في: |
2018
|
| الوصول للمادة أونلاين: | http://hdl.handle.net/10725/7221 https://doi.org/10.1108/BIJ-04-2017-0071 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://www.emerald.com/insight/content/doi/10.1108/BIJ-04-2017-0071/full/html |
| الوسوم: |
إضافة وسم
لا توجد وسوم, كن أول من يضع وسما على هذه التسجيلة!
|
| _version_ | 1864513481768697856 |
|---|---|
| author | Dah, Mustafa |
| author2 | Jizi, Mohammad Sbeity, Sadim |
| author2_role | author author |
| author_facet | Dah, Mustafa Jizi, Mohammad Sbeity, Sadim |
| author_role | author |
| dc.creator.none.fl_str_mv | Dah, Mustafa Jizi, Mohammad Sbeity, Sadim |
| dc.date.none.fl_str_mv | 2018-03-16T09:51:26Z 2018-03-16T09:51:26Z 2018 2018-03-16 |
| dc.identifier.none.fl_str_mv | 1463-5771 http://hdl.handle.net/10725/7221 https://doi.org/10.1108/BIJ-04-2017-0071 Dah, M., Jizi, M., & Sbeity, S. (2018). Board independence and managerial authority. Benchmarking: An International Journal, 25(3), 838-853. http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://www.emerald.com/insight/content/doi/10.1108/BIJ-04-2017-0071/full/html |
| dc.language.none.fl_str_mv | en |
| dc.relation.none.fl_str_mv | Benchmarking: An International Journal |
| dc.rights.*.fl_str_mv | info:eu-repo/semantics/openAccess |
| dc.title.none.fl_str_mv | Board independence and managerial authority |
| dc.type.none.fl_str_mv | Article info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/article |
| description | Purpose The imposition of the Sarbanes Oxley Act and the NYSE/NASDAQ regulations boosted the proportion of independent directors serving on corporate boards. For certain firms, increasing the number of independent directors may impose costs that exceed the benefits. This paper examines the implications of increased independence following SOX, relative to the pre-SOX board independence benchmark, on managerial authority and entrenchment within the firm. Design/methodology/approach Data are collected from COMPUSTAT, ExecuComp, and RiskMetrics. Data are divided into two periods, pre-SOX (1996-2001) and post-SOX (2002-2006). The focus is on the sub-group of firms who were not complying with the board independence requirement prior to SOX and became compliant afterwards. Various regressions are employed to assess the implications of increased independence following SOX on managerial authority and entrenchment. Findings The appreciation in board independence post-SOX significantly inflates both managerial compensation and the likelihood of CEO duality. Also, there is a positive association between board independence and managerial entrenchment during both the pre- and post-SOX periods. Imposed board composition requirements diminished board monitoring efficiency and boosted the CEO dominance and control over the firm. Originality/value This research adds to the extant literature investigating the implications of SOX on internal monitoring and governance. The results are based on an off equilibrium phenomenon in which companies were obliged to alter their endogenously determined board structure. Thus, regulations to improve governance could backfire as the CEO might abuse them to extract private benefits. |
| eu_rights_str_mv | openAccess |
| format | article |
| id | LAURepo_8d03ba55035e02a647b5f292f07b6a2d |
| identifier_str_mv | 1463-5771 Dah, M., Jizi, M., & Sbeity, S. (2018). Board independence and managerial authority. Benchmarking: An International Journal, 25(3), 838-853. |
| language_invalid_str_mv | en |
| network_acronym_str | LAURepo |
| network_name_str | Lebanese American University repository |
| oai_identifier_str | oai:laur.lau.edu.lb:10725/7221 |
| publishDate | 2018 |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| spelling | Board independence and managerial authorityDah, MustafaJizi, MohammadSbeity, SadimPurpose The imposition of the Sarbanes Oxley Act and the NYSE/NASDAQ regulations boosted the proportion of independent directors serving on corporate boards. For certain firms, increasing the number of independent directors may impose costs that exceed the benefits. This paper examines the implications of increased independence following SOX, relative to the pre-SOX board independence benchmark, on managerial authority and entrenchment within the firm. Design/methodology/approach Data are collected from COMPUSTAT, ExecuComp, and RiskMetrics. Data are divided into two periods, pre-SOX (1996-2001) and post-SOX (2002-2006). The focus is on the sub-group of firms who were not complying with the board independence requirement prior to SOX and became compliant afterwards. Various regressions are employed to assess the implications of increased independence following SOX on managerial authority and entrenchment. Findings The appreciation in board independence post-SOX significantly inflates both managerial compensation and the likelihood of CEO duality. Also, there is a positive association between board independence and managerial entrenchment during both the pre- and post-SOX periods. Imposed board composition requirements diminished board monitoring efficiency and boosted the CEO dominance and control over the firm. Originality/value This research adds to the extant literature investigating the implications of SOX on internal monitoring and governance. The results are based on an off equilibrium phenomenon in which companies were obliged to alter their endogenously determined board structure. Thus, regulations to improve governance could backfire as the CEO might abuse them to extract private benefits.PublishedN/A2018-03-16T09:51:26Z2018-03-16T09:51:26Z20182018-03-16Articleinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article1463-5771http://hdl.handle.net/10725/7221https://doi.org/10.1108/BIJ-04-2017-0071Dah, M., Jizi, M., & Sbeity, S. (2018). Board independence and managerial authority. Benchmarking: An International Journal, 25(3), 838-853.http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.phphttps://www.emerald.com/insight/content/doi/10.1108/BIJ-04-2017-0071/full/htmlenBenchmarking: An International Journalinfo:eu-repo/semantics/openAccessoai:laur.lau.edu.lb:10725/72212021-03-19T09:10:15Z |
| spellingShingle | Board independence and managerial authority Dah, Mustafa |
| status_str | publishedVersion |
| title | Board independence and managerial authority |
| title_full | Board independence and managerial authority |
| title_fullStr | Board independence and managerial authority |
| title_full_unstemmed | Board independence and managerial authority |
| title_short | Board independence and managerial authority |
| title_sort | Board independence and managerial authority |
| url | http://hdl.handle.net/10725/7221 https://doi.org/10.1108/BIJ-04-2017-0071 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://www.emerald.com/insight/content/doi/10.1108/BIJ-04-2017-0071/full/html |