The impact of board quality and nomination committee on corporate bankruptcy

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• 作者：Kingsley Opoku Appiah^a ; ^{koappiah.ksb@knust.edu.gh} ; Amon Chizema^b ; ¹ ; ^{A.Chizema@bham.ac.uk}
• 关键词：Corporate governance ; Board of directors ; Agency theory ; Board structure ; Board composition ; Corporate insolvency
• 刊名：Advances in Accounting
• 出版年：2016
• 出版时间：December 2016
• 年：2016
• 卷：35
• 期：Complete
• 页码：75-81
• 全文大小：333 K
• 卷排序：35

文摘

This paper examines the effects of board quality on the relationship between corporate bankruptcy and nomination committee effectiveness. We argue that the proportion of outside directors, a proxy of board quality, arguably captures the extent of board control and resources. Based on dataset from 1835 firm-year observations for 98 bankrupt and 269 non-bankrupt UK listed non-financial firms between 1994 and 2011 and using the agency and resource dependence theories, we predict and find that nomination committee effectiveness negatively affects corporate bankruptcy and that board quality mitigates the negative effects. The results lend support to the notion that firms benefit from board quality in terms of outside directors' ability to monitor CEO on behalf of shareholders and also provide advice, counsel and legitimacy to the firm. This study extends the present research on corporate bankruptcy by providing evidence on the impact of board quality and nomination committee effectiveness on UK corporate bankruptcy.