This research offers the perceptions of independent non-executive directors (INEDs) in Thailand of their roles and the way they cope with constraints such as family-concentrated ownership structures and asymmetric information problems. There has been scant prior research in this area. The researcher applied qualitative research techniques to understand what was in the interviewees’ minds. The semi-structured interview was employed because it allowed some flexibility while also providing some guidelines. The fieldwork data reveals that interviewed INEDs were aware of a board’s control role which, in theory, can be realised by nominating and remunerating top management; however, in practice they had no authority to do so due to the family-concentrated ownership of Thai firms. Ensuring compliance with laws and regulations was the actual controlling activity which they undertook. Another role perceived was a service role concerned with giving advice and counsel to management. Although the interviewees rarely got involved with planning and directing, they contributed their expertise to the board. Their service function also helped them to better fulfil a control role because an INED’s service role builds his credibility in the eyes of management. This allows them to gain access to better information about a company – a critical input of a control role. Therefore, a good relationship between executives and non-executives is an essential factor for INED’s effectiveness. i A proportion of outside directors on the board and a director’s independent background were not considered guarantees of board independence. Only an INED’s independence of mind matters. Such independence can be exercised by resigning in order to send a signal to the market and protect minority shareholders. The competencies and personal characteristics of INEDs and their motivations are other elements contributing to their effectiveness.

This thesis is comprised of three essays dealing with outside directors. The first essay addresses the signaling role that outside directors play. This is a role that is especially important for entrepreneurial firms, and has been relatively neglected in corporate governance research. The primary contribution of this chapter is in developing an analytical model and predictive framework on which future empirical and analytical research on directors' signaling role can be based. This chapter also contributes to the signaling theory literature by deriving a new type of equilibrium — the "stochastic separating equilibrium" — which may well be applicable in a broader set of models that incorporate signaling through middlemen. This equilibrium has an important realistic feature in that it permits the coexistence of both high and low quality firms in equilibrium. In the second study, I address directors' monitoring role. This essay examines whether a systematic relationship exists between a board's composition and discrete strategic decisions of a firm, which have been addressed in the literature as involving potential conflicting interests between managers and shareholders. To explore this question, I conducted seven meta-analyses of relevant strategic decisions, on which I could obtain data. The results provide evidence for the presence of systematic relationships between a board's composition and five out of the seven strategies examined. Interestingly, these systematic relationships provide only limited support to the predictions of agency theory, which is the predominant rational behind this line of research. In the third essay, I examine the effects of outside directors' stock-based compensation on one indicator of board monitoring effectiveness: firms' research and development (R&D) intensity. The results suggest that both the percentage of stock-based compensation and the proportion of stock options within it are positively related to firms' R & D expenditures. Moreover, stock-based compensation moderates the relationship between board composition and R & D intensity. These results highlight the need to reevaluate previous findings that addressed the effects of board composition on both firm performance and firm strategic decisions.

Thesis (Ph.D.). / Written for the Desautels Faculty of Management. Title from title page of PDF (viewed 2008/02/12). Includes bibliographical references.

Thesis (MBus) - Faculty of Business and Enterprise, Swinburne University of Technology, 2006. / This thesis is submitted in fulfillment of the requirements for the degree of Master of Business in the Faculty of Business and Enterprise, Swinburne University of Technology - 2006. Typescript. Includes bibliographical references (p. 113-125).

Thesis (Ph. D.)--University of Missouri-Columbia, 2004. / Typescript. Vita. Includes bibliographical references (leaves 87-88). Also available on the Internet.

Thesis (MBus) -- AUT University, 2009. / Includes bibliographical references. Also held in print (137 leaves ; 30 cm.) in the Archive at the City Campus (T 658.422 DEA)

Thesis (Ph. D.)--University of Missouri-Columbia, 2004. / Typescript. Vita. Includes bibliographical references (leaves 87-88). Also available on the Internet.

This thesis is comprised of three essays dealing with outside directors. The first essay addresses the signaling role that outside directors play. This is a role that is especially important for entrepreneurial firms, and has been relatively neglected in corporate governance research. The primary contribution of this chapter is in developing an analytical model and predictive framework on which future empirical and analytical research on directors' signaling role can be based. This chapter also contributes to the signaling theory literature by deriving a new type of equilibrium — the "stochastic separating equilibrium" — which may well be applicable in a broader set of models that incorporate signaling through middlemen. This equilibrium has an important realistic feature in that it permits the coexistence of both high and low quality firms in equilibrium. In the second study, I address directors' monitoring role. This essay examines whether a systematic relationship exists between a board's composition and discrete strategic decisions of a firm, which have been addressed in the literature as involving potential conflicting interests between managers and shareholders. To explore this question, I conducted seven meta-analyses of relevant strategic decisions, on which I could obtain data. The results provide evidence for the presence of systematic relationships between a board's composition and five out of the seven strategies examined. Interestingly, these systematic relationships provide only limited support to the predictions of agency theory, which is the predominant rational behind this line of research. In the third essay, I examine the effects of outside directors' stock-based compensation on one indicator of board monitoring effectiveness: firms' research and development (R&D) intensity. The results suggest that both the percentage of stock-based compensation and the proportion of stock options within it are positively related to firms' R & D expenditures. Moreover, stock-based compensation moderates the relationship between board composition and R & D intensity. These results highlight the need to reevaluate previous findings that addressed the effects of board composition on both firm performance and firm strategic decisions. / Business, Sauder School of / Accounting, Division of / Graduate

In Essay 1, we examine the departure of independent directors among 525 Taiwanese publicly listed firms with independent directors on the board between 2002 and 2006. We find that the accounting restatements is positively associated with the number (and the rate) of departures in the firm. This result implies that deteriorating financial reporting quality is related to the departures, which is consistent with Srinivasan's (2005) finding among the U.S. firms. We also find the number (and the rate) of departures is positively associated with shares owned by controlling families. Our findings support the independent directors’ role for intense monitoring based on agency theory. The results also support Anderson and Reeb’s (2004) result based opinion that that independent directors can protect minority shareholders’ interest by hindering dominant or family shareholders’ opportunistic or expropriation behaviors. In essay 2, we examine if there are significant associations between firm performance and (1) directors’ shareholdings, (2) directors’ family shareholdings, and (3) independent directors’ career affiliations in 2,164 Taiwanese publicly listed firms between 2002 and 2006. After addressing for possible endogeneity and controlling for firm specific variables, we find a positive association between CEO’s shareholding and firm performance. Consistent with agency theory and incentive effect, this result indicates that CEOs have control over firms’ operation and have incentive to maximize firms’ value. Also, we find a negative association between firm performance and non-executive directors’ shareholdings. This result, which is consistent with the entrenchment effect, implies that the possibility of expropriating minority shareholders’ interest may increase with shares owned by non-executive directors. However, we find that the non-executive directors’ family shareholding is positively related to firm performance, which implies that non-executive directors may be motivated by their family members to improve firm value. The results also imply that the majority-minority agency problem (Villalonga and Amit, 2006) can be reduced when director’s family welfare is at stake. In addition, consistent with skill matching theory (Jovanovic, 1979), we find a positive association between independent director’s career affiliation of executive officer and firm performance, which implies that independent directors who are executives are likely to improve firm performance.

本文研究了海外背景的董事在中国上市公司中的表现和作用。本文从董事最基本的两个作用监督和指导出发，研究了海外背景的董事对于董事会治理和公司表现的各项投入和产出。研究结果表明，海外背景的董事在董事会会议的缺席记录更多，更少参与特殊委员会的工作。海外背景的董事对于高管薪酬水平的管理更弱，但在解雇表现不佳的CEO有积极的作用。在指导作用上，海外背景的董事表现得并不尽如人意。海外背景的董事并没有利用自己的海外经历为公司在海外并购业务来带好处。最后，海外背景董事占比最高的公司，托宾Q所代表的公司表现更低。这篇文章的重要性在于，这是第一篇用国内数据研究海外背景董事在公司治理和表现中的作用的文章，同时也是第一篇详细阐述不同的海外背景所具有的不同影响的文章。 / This paper discusses the presence and the roles of directors with foreign backgrounds in China’s listed companies. Starting from the two basic roles of boards, monitoring and directing, this paper examines the inputs and outputs of foreign-background directors (FBDs) on board governance and firm performance. The result shows that FBDs are associated with worse board meeting attendance records, less special committee assignments, weaker control in senior executive compensation level, but more strength in firing underperforming CEOs. In directing-related functions, FBDs does not meet the expectation that they can benefit the firm’s cross-border merger and acquisition decision by taking advantage of their foreign background knowledge. Finally, firms with higher fraction of FBDs on board are associated with poorer performance in terms of Tobin's Q. This research is significant because it is the first exploration of the functions of FBDs in listed corporations using China’s data, and the first attempt to identify the role of each different foreign background. / Detailed summary in vernacular field only. / Xia, Keqin. / Thesis (M.Phil.)--Chinese University of Hong Kong, 2012. / Includes bibliographical references (leaves 30-34). / Abstracts also in Chinese. / Foreign Background Directors and Corporate Performance: Empirical Evidence from China’s listed Companies --- p.I / ABSTRACT --- p.II / 摘要： --- p.III / ACKNOWLEDGEMENTS --- p.IV / Chapter SECTION I --- : INTRODUCTION --- p.1 / Chapter SECTION II --- : LITERATURE REVIEW --- p.3 / Chapter 2.1 --- Board Functions--Monitoring and Directing --- p.3 / Chapter 2.1.1 --- Monitoring function & agency problem --- p.3 / Chapter 2.1.2 --- Directing function --- p.6 / Chapter 2.2 --- Board Governance and Firm Performance --- p.6 / Chapter SECTION III --- : DATA AND METHODS --- p.7 / Chapter 3.1 --- Individual characteristics --- p.7 / Chapter 3.2 --- Board characteristics --- p.8 / Chapter 3.3 --- Firm characteristics --- p.10 / Chapter 3.4 --- Different foreign backgrounds --- p.10 / Chapter SECTION IV --- : EMPIRICAL RESULTS --- p.12 / Chapter 4.1 --- Board Meeting Attendance Problem and FBDs --- p.12 / Chapter 4.1.1 --- Regression analysis of absence ratio --- p.14 / Chapter 4.1.2 --- Regression analysis of the total absence ratio --- p.15 / Chapter 4.1.3 --- Conclusion on attendance problem and foreign backgrounds --- p.17 / Chapter 4.2 --- Probit Regression Analysis of Committee Assignments --- p.17 / Chapter 4.3 --- Regression Analysis of Senior Executives’ Compensation --- p.19 / Chapter 4.4 --- Regression Analysis of CEO Turnover Rate --- p.21 / Chapter 4.5 --- An Event Study: Cross-border Mergers & Acquisitions (M&A) Analysis --- p.23 / Chapter 4.6 --- Firm Performance Regression Analysis: FBDs and ROA --- p.26 / Chapter 4.7 --- Firm Performance Regression Analysis: Tobin’s Q and FBDs --- p.28 / Chapter SECTION V --- : SUMMARY --- p.29 / REFERENCES --- p.30 / FIGURES AND TABLES --- p.35