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Examination of Board Independence and Board Involvement: The Role of Information Provision and Sharing

이사회 독립성과 이사회 관여: 정보 제공 및 공유를 중심으로

  • 윤현중 (강원대학교 경영회계학부)
  • Received : 2016.09.29
  • Accepted : 2016.11.24
  • Published : 2016.12.31

Abstract

There is a growing awareness about the role of the board of directors in decision making, which is crucial to vitalize board activities in Korean firms. Given the academic and social needs, the current study is designed to identify the relationship between board independence and the board involvement of directors, highlighting the important aspects of information provision from diverse channels and information sharing among external directors. In this study, I include not only traditional variables to address the structural independence of the board but also the information provision and information sharing variables to explain how external directors, on average, are involved in board decisions. The research results from 136 Korean business samples show positive relationships between board independence and board involvement, but the influence of information provision and sharing proves to be significant in increasing the level of the board involvement of external directors. These findings suggest that active communication and information sharing among external directors, as well as an independent structural design for the board of directors, are important factors to improve the level of board involvement. Based on these results, the current paper provides theoretical and practical implications for corporate governance and knowledge management. Future research directions and limitations are also discussed.

Acknowledgement

Supported by : 강원대학교

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