Title: Independent directors and the decision of US manufacturing firms about the amount of dividends

Authors: Amarjit Gill; Léo-Paul Dana; John Obradovich

Addresses: Department of Finance and Management Science, Edwards School of Business, The University of Saskatchewan, 25 Campus Drive, Saskatoon, SK, S7N-5A7, Canada ' Montpellier Research in Management, Montpellier Business School, 2300 avenue des Moulins, Montpellier, France ' Spring Arbor University, 106 E. Main Street, Spring Arbor, MI, 49283, USA

Abstract: One of the most important factors that stock investors use to make investment decision in the stock market is the amount of dividends that company has paid in the past and is expected to pay in the future. The purpose of this study is to examine the impact of independent directors on the decision of US manufacturing firms about the amount of dividends. The study used a sample of 183 US manufacturing firms listed on the New York Stock Exchange (NYSE) for a period of five years (from 2009-2013). By applying a co-relational and non-experimental research design, this study found that the presence of independent directors positively impacts the decision of US manufacturing firms about the amount of dividends. The results also show that the decision of US manufacturing firms about the amount of dividends is positively associated with audit committee, firm size, firm age and financial performance and negatively associated with operating risk. The findings may be useful for financial managers, operations managers, financial management consultants, stock market investors and other stakeholders.

Keywords: corporate governance; independent directors; board size; CEO duality; CEO tenure; audit committee; payments decisions; dividends; dividend payments; USA; United States; manufacturing industry.

DOI: 10.1504/IJBG.2015.070226

International Journal of Business and Globalisation, 2015 Vol.15 No.1, pp.96 - 108

Received: 05 Jan 2015
Accepted: 01 Feb 2015

Published online: 26 Jun 2015 *

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