Board structure: an empirical study of firms in Anglo-American governance environments

M. I. Muller-Kahle, Liu Wang, Jun Wu

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.

Original languageEnglish (US)
Pages (from-to)681-699
Number of pages19
JournalManagerial Finance
Volume40
Issue number7
DOIs
StatePublished - Jun 3 2014

Fingerprint

Firm value
Empirical study
Board structure
Governance environment
Board independence
Board size
Resource dependence theory
Monitoring
Panel data analysis
Design methodology
Agency theory
Outside directors
Board of directors
Guidance

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting (miscellaneous)
  • Finance

Cite this

@article{2b1fbaf4d32a4861932eed9f82235c97,
title = "Board structure: an empirical study of firms in Anglo-American governance environments",
abstract = "Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.",
author = "Muller-Kahle, {M. I.} and Liu Wang and Jun Wu",
year = "2014",
month = "6",
day = "3",
doi = "10.1108/MF-04-2013-0102",
language = "English (US)",
volume = "40",
pages = "681--699",
journal = "Managerial Finance",
issn = "0307-4358",
publisher = "Emerald Group Publishing Ltd.",
number = "7",

}

Board structure : an empirical study of firms in Anglo-American governance environments. / Muller-Kahle, M. I.; Wang, Liu; Wu, Jun.

In: Managerial Finance, Vol. 40, No. 7, 03.06.2014, p. 681-699.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Board structure

T2 - an empirical study of firms in Anglo-American governance environments

AU - Muller-Kahle, M. I.

AU - Wang, Liu

AU - Wu, Jun

PY - 2014/6/3

Y1 - 2014/6/3

N2 - Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.

AB - Purpose – With boards of directors playing both monitoring and guidance roles, the purpose of this paper is to examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/methodology/approach – Using a sample of firms in the USA and the UK from 2000 to 2007, the paper conducts a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings – The paper finds distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, the paper finds that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, the paper finds no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the USA. Social implications – The paper finds strong support for resource dependence theory in the UK but limited support for agency theory in the USA. Originality/value – This paper takes a multi-country approach to examining the impact of board structure on firm value.

UR - http://www.scopus.com/inward/record.url?scp=84996602629&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84996602629&partnerID=8YFLogxK

U2 - 10.1108/MF-04-2013-0102

DO - 10.1108/MF-04-2013-0102

M3 - Article

AN - SCOPUS:84996602629

VL - 40

SP - 681

EP - 699

JO - Managerial Finance

JF - Managerial Finance

SN - 0307-4358

IS - 7

ER -