Reputation concerns of independent directors: : Evidence from individual director voting

• Autores: Wei Jiang, Hualin Wan, Shan Zhao
• Localización: Review of Financial Studies, ISSN-e 1465-7368, Vol. 29, Nº. 3, 2016, págs. 655-696
• Idioma: inglés
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• Resumen

  • This study examines the voting behavior of independent directors of public companies in China from 2004–2012. The unique data at the individual-director level overcome endogeneity in both board formation and proposal selection by allowing analysis based on within-board proposal variation. Career-conscious directors, measured by age and the director's reputation value, are more likely to dissent; dissension is eventually rewarded in the marketplace in the form of more outside directorships and a lower risk of regulatory sanctions. Director dissension improves corporate governance and market transparency primarily through the responses of stakeholders (shareholders, creditors, and regulators), to whom dissension disseminates information.