Relationship between board independence and firm performance post Sarbanes Oxley
We examine the relationship between board independence and firm performance over multiple years, post-Sarbanes Oxley. The enactment of the Sarbanes-Oxley Act (SOX) in July, 2002 coincided with the NYSE/NASDAQ proposals to alter their standards for listed companies. These changes included a requireme...
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| Veröffentlicht in: | Corporate Ownership and Control 2013, Vol.11 (1), p.65-80 |
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| container_title | Corporate Ownership and Control |
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| creator | Kanagaretnam, Kiridaran Lobo, Gerald J. Whalen, Dennis J. |
| description | We examine the relationship between board independence and firm performance over multiple years, post-Sarbanes Oxley. The enactment of the Sarbanes-Oxley Act (SOX) in July, 2002 coincided with the NYSE/NASDAQ proposals to alter their standards for listed companies. These changes included a requirement that boards be comprised of a majority of independent directors and tightened the criteria for a director to be considered “independent”. We hypothesize and find that the passage of SOX, together with the new NYSE/NASDAQ regulations, result in independent directors who are more effective monitors of management, leading to stronger firm performance. Our results should bolster investor confidence in the financial markets at a time when the NYSE/NASDAQ has strengthened the corporate governance standards for listed companies. |
| doi_str_mv | 10.22495/cocv11i1art6 |
| format | Article |
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| ispartof | Corporate Ownership and Control, 2013, Vol.11 (1), p.65-80 |
| issn | 1727-9232 1810-3057 |
| language | eng |
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| source | Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals |
| subjects | Board of directors Business management Capital market Corporate governance Hypothesis Organizational effectiveness |
| title | Relationship between board independence and firm performance post Sarbanes Oxley |
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