Question
In Australia, the Australian Stock Exchange recommends that the majority of the board should be independent directors. However, there has been a lot of debate
In Australia, the Australian Stock Exchange recommends that the majority of the board should be independent directors. However, there has been a lot of debate among scholars about the value of board of directors, especially for independent or outside directors. Many researchers argue, because of the competition in product and labour market, the managers interests are aligned with the interests of shareholders. Therefore, directors may not necessarily provide extra value to the firm by reducing the potential agency costs. However, those who believe the board of directors is a key mechanism of corporate governance acknowledge that directors, especially independent directors, monitor managers behaviour and create value for shareholders. Which arguments do you agree? What are the advantage and disadvantage of having independent directors in public listed companies?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started