Family business, director compensation and board efficacy: The case of Taiwan

Tsun Jui Hsieh, Yu Ju Chen

Research output: Contribution to journalArticle

Abstract

This paper investigates the impact of outside directors on firm performance during legal transitions and examines how the roles of family business and director compensation influence board efficacy. By using Taiwanese listed companies as our sample, the empirical results show that outside directors who are appointed by legal mandate have less positive impacts on firm performance than outside directors appointed voluntarily. Family business weakens the positive impact of outside director on firm performance. The evidence further suggests that director compensation contributes to firm performance, particularly when outside directors are voluntarily appointed. The findings provide western managers with an understanding of how the typical Chinese family business affects board independence. We also demonstrate and incorporate the cultural and the ownership characteristics into the analysis to present a country-specific pattern that should be informative for foreign investors who are concerned about the quality of corporate governance in East Asia.

Original languageEnglish
Pages (from-to)81-91
Number of pages11
JournalCorporate Ownership and Control
Volume11
Issue number1 A
DOIs
Publication statusPublished - 2013

Fingerprint

Director compensation
Taiwan
Outside directors
Family business
Efficacy
Firm performance
Empirical results
Foreign investors
Mandate
Board independence
Listed companies
East Asia
Corporate governance
Ownership
Managers

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)

Cite this

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Family business, director compensation and board efficacy : The case of Taiwan. / Hsieh, Tsun Jui; Chen, Yu Ju.

In: Corporate Ownership and Control, Vol. 11, No. 1 A, 2013, p. 81-91.

Research output: Contribution to journalArticle

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