Title: Board independence and firm performance in India

Authors: Pranati Mohapatra

Addresses: ICFAI Business School, Hyderabad, The ICFAI Foundation for Higher Education, Donthanpalli, Shankarpally Road, Hyderabad 501 203, India

Abstract: Corporate governance guidelines all over the globe are focusing on adding independent directors to the board to improve board effectiveness. Does the addition of more number of independent directors improve firm performance? The extant literature does not give a unanimous answer. In the given background, the present work explores the impact of board independence on firm performance for the emerging Indian market. The study examines Nifty firms over a period of six years from 2005-2010 using panel regression. The results show board independence to have positive impact on Tobin's Q, the proxy for firm value. The study found no direct impact of board independence on operating performance.

Keywords: agency conflict; board independence; corporate governance; firm value; Tobin's Q; panel regression; firm performance; India.

DOI: 10.1504/IJMP.2016.077834

International Journal of Management Practice, 2016 Vol.9 No.3, pp.317 - 332

Received: 02 Jun 2015
Accepted: 19 Apr 2016
Published online: 16 Jul 2016 *

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