||The Impact of Board Director’s Quality on Firm’s Performance
||Graduate Institute of Finance & Banking
Level of Education
Board directors, the core factor which holds the key point to maximize the wealth of shareholders which is one of the hot issues discussed nowadays in corporate governance. Among the prior studies, most of them focus on the quantity factors such as board size, board composition, family control, but this time we focus on the quality instead of quantity, leads to a study on the professional background of the board directors. By examining 14 selected industries, 864 firm-year observations of Taiwan public listed companies within 2006 to 2009, we obtain a result that the quality of board directors, including level of education and professional background of the board directors have highest significance level and have a positive relation with the firm’s performance. This evidence suggests that, other than the quantity of board directors, the quality which includes the professional background and level of education of the board directors positively influence the firm’s performance.
1. Introduction 1
2. Literature Review 3
2.1. Board Composition 3
2.2. Family Control 4
2.3. Board Size and others 5
2.4. Board Quality 6
3. Data and Methodology 7
3.1. Quality Grading 7
3.2. Methodology 10
3.3. Descriptive Statistic 11
4. Empirical Result 13
5. Conclusion 21
6. References 22
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