A study of the independent non-executive directors of the listed companies in Hong Kong

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A study of the independent non-executive directors of the listed companies in Hong Kong

 

Author: Mok, Kam-wan
Title: A study of the independent non-executive directors of the listed companies in Hong Kong
Year: 2000
Subject: Directors of corporations -- China -- Hong Kong
Corporations -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Dept. of Management
Pages: ix, 112 leaves : col. ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1520753
URI: http://theses.lib.polyu.edu.hk/handle/200/3173
Abstract: This study examines the independence of the independent non-executive directors in the listed companies in Hong Kong. Many Hong Kong listed companies are majority family-controlled and have owner-manager type of structure. Independent non-executive directors have a primary role to monitor executive management and protect minority interests, and their independence is essential to perform such role effectively. Based on the agency theory, the study examines the role of independent non-executive directors in the board of Hong Kong listed companies. The paper also defines the concept of independence with respect to independent non-executive directors and sets up criteria to test the independence of directors. The study analyzes 100 listed companies in Hong Kong and utilizes the information disclosed in the annual reports of these companies. The results indicate that 34% of independent non-executive directors in the Hong Kong listed companies are not independent and have affiliations that potentially threaten their independence. The directors are mostly affiliated with their companies by having an interest in securities or share options. The paper concludes that it is necessary to improve the transparency of the companies and the disclosure of the directors' interests, as well as to increase the awareness of directors of their duties and responsibilities as independent non-executive directors.

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