Monitoring board committee structure and market valuation in large publicly listed South African corporations
Monitoring board committee structure and market valuation in large publicly listed South African corporations
We examine the association between the presence of monitoring board committees (i.e., audit, nomination, and remuneration) and market valuation in South Africa using a sample of listed corporations. We find a significant positive connection between the presence of monitoring board committees and market valuation, but only in corporations that have independent monitoring board committees and/or all three monitoring board committees that we have investigated simultaneously. This implies that the market values corporations with independent and/or the three monitoring board committees more highly. Our results provide empirical support for agency theory, which indicates that the presence of independent board committees increases the capacity of corporate boards to effectively advise, monitor and discipline top management, and thereby improving market valuation.
310-325
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
15 February 2013
Ntim, Collins G.
1f344edc-8005-4e96-8972-d56c4dade46b
Ntim, Collins G.
(2013)
Monitoring board committee structure and market valuation in large publicly listed South African corporations.
International Journal of Managerial and Financial Accounting, 5 (3), .
(doi:10.1504/IJMFA.2013.058552).
Abstract
We examine the association between the presence of monitoring board committees (i.e., audit, nomination, and remuneration) and market valuation in South Africa using a sample of listed corporations. We find a significant positive connection between the presence of monitoring board committees and market valuation, but only in corporations that have independent monitoring board committees and/or all three monitoring board committees that we have investigated simultaneously. This implies that the market values corporations with independent and/or the three monitoring board committees more highly. Our results provide empirical support for agency theory, which indicates that the presence of independent board committees increases the capacity of corporate boards to effectively advise, monitor and discipline top management, and thereby improving market valuation.
Text
Collins Ntim International Journal of Managerial and Financial Accounting 2013
- Accepted Manuscript
More information
Published date: 15 February 2013
Organisations:
Centre of Excellence for International Banking, Finance & Accounting, Accounting
Identifiers
Local EPrints ID: 357184
URI: http://eprints.soton.ac.uk/id/eprint/357184
ISSN: 1753-6715
PURE UUID: b118496d-e06b-46d7-8f03-64309dd6c951
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Date deposited: 26 Sep 2013 15:24
Last modified: 15 Mar 2024 02:27
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