Corporate board and board committee independence, firm performance, and family ownership concentration: an analysis based on Hong Kong firms

Sidney Leung*, Grant Richardson, Bikki Jaggi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

51 Citations (Scopus)

Abstract

This study examines whether the relationship between corporate board and board committee independence and firm performance is moderated by the concentration of family ownership. Based on a sample of Hong Kong firms, we find no significant association between the independence of corporate boards or board committees and firm performance in family firms, whereas board independence is positively associated with firm performance in non-family firms. Additionally, our findings show that the proportion of independent directors on the corporate boards of family firms is lower than that of non-family firms, but we find no significant difference in the representation of independent directors on the key committees of corporate boards between family and non-family firms. Overall, these results suggest that the "one size fits all" approach required by the regulatory authorities for appointing independent directors on corporate boards may not necessarily enhance firm performance, especially for family firms. Thus, the requirement to appoint independent directors to the corporate boards of family firms needs to be reconsidered.

Original languageEnglish
Pages (from-to)16-31
Number of pages16
JournalJournal of Contemporary Accounting and Economics
Volume10
Issue number1
DOIs
Publication statusPublished - 1 Apr 2014
Externally publishedYes

Keywords

  • Board independence
  • Committee independence
  • Family firms
  • Firm performance

Fingerprint

Dive into the research topics of 'Corporate board and board committee independence, firm performance, and family ownership concentration: an analysis based on Hong Kong firms'. Together they form a unique fingerprint.

Cite this