Can Independent Directors Help to Improve the Financial Performance of Listed Electronic Firms

• Main Authors: Yen-Na Li, 李燕娜
• Other Authors: Tsun-Siou Lee
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/23536029724159555001

碩士 === 國立臺灣大學 === 國際企業管理組 === 99 === The board of directors (the “Board”) is key to corporate governance. Enhancing the independence of the Board and introducing independent directors into the Board is a key mechanism for countries across the world to improve corporate governance. This study is to assess the impact over short-term, mid-term and long-term financial performance between companies that have and have not set-up independent directors by focusing on Taiwan’s listed companies in the electronic industry between 2006 and 2010. To avoid the impact of industry specific factors and the impact due to difference in the scale of companies, sample companies in this study are selected, matched and analyzed based on industry sub-group in the electronic industry category of the Taiwan Stock Exchange as well as the scale of total assets of companies selected for study. This study further classified listed companies that had set-up independent directors between 2006 and 2010 into different sub-groups in order to assess whether there is any significant variance over short-term, mid-term and long-term financial performance between companies that (1) mandatorily set-up independent directors and met the ratio of seats (of independent directors) as required by law; (2) mandatorily set-up independent directors with the ratio of seats exceeded those required by law; and (3) set-up independent director voluntarily. This study has concluded that: (1). the short-term, mid-term and long-term financial performance for Companies with independent directors significantly exceeded those without independent directors. (2). the preliminary finding of this study identified that in some of the years under study (i.e. 2009 and 2010), part of the short-term financial performance indicators for companies who set-up independent directors mandatorily (regardless the ratio of seats met or exceeded the statutory requirements) significantly exceeded those who set-up independent directors voluntarily. No significant variance was identified for mid-term and long-term financial performance. This study has confirmed that the financial performance for companies that have set-up independent directors exceeded those that did not set-up independent directors. It is expected that the results of this study may be used as a reference for companies and the regulators to implement the mechanism of independent directors.