Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
The Governance Role of Independent Directors in Indonesian Family and Non-Family Firms
Dublin Core
Title
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
The Governance Role of Independent Directors in Indonesian Family and Non-Family Firms
The Governance Role of Independent Directors in Indonesian Family and Non-Family Firms
Subject
agency theory; family control; firm value; independent directors; two-tier board
Description
This paper examines the governance role of independent directors in Indonesia using family and non-family firm samples. The literature suggests that independent directors can mitigate conflicts of interest between controlling families and non-controlling or minority shareholders among family firms. This study utilizes panel data of firms listed
from 2005 to 2019, comprising 4.865 firm-year observations. Our result reveals that the performance of family firms is significantly worse than that of non-family firms measured by Tobin’s Q and that among family firms, independent directors or commissioners have an insignificance impact on firm value. Our findings support the expropriation theory and are not in line with the notion that independent directors can mitigate agency problems among family firms. Our analysis, however, provides strong evidence that independent directors or commissioners in non-family firms positively affect firm performance.
from 2005 to 2019, comprising 4.865 firm-year observations. Our result reveals that the performance of family firms is significantly worse than that of non-family firms measured by Tobin’s Q and that among family firms, independent directors or commissioners have an insignificance impact on firm value. Our findings support the expropriation theory and are not in line with the notion that independent directors can mitigate agency problems among family firms. Our analysis, however, provides strong evidence that independent directors or commissioners in non-family firms positively affect firm performance.
Creator
Lukas Setia-Atmaja, Athalia Ariati Hidayat
Source
DOI: 10.26905/jkdp.v25i4.6382
Publisher
Universitas Merdeka Malang
Date
October 2021
Contributor
Sri Wahyuni
Rights
ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Files
Collection
Citation
Lukas Setia-Atmaja, Athalia Ariati Hidayat, “Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
The Governance Role of Independent Directors in Indonesian Family and Non-Family Firms,” Repository Horizon University Indonesia, accessed April 25, 2025, https://repository.horizon.ac.id/items/show/4816.
The Governance Role of Independent Directors in Indonesian Family and Non-Family Firms,” Repository Horizon University Indonesia, accessed April 25, 2025, https://repository.horizon.ac.id/items/show/4816.