On the Association of Multiple Directorships of Independent Supervisions and Financial Reporting Quality

• Main Authors: Feng-Yu Pan, 潘豐裕
• Other Authors: Victoria Shao-Pin Wang
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/47359131856043215665

碩士 === 國立中興大學 === 會計學研究所 === 93 === The government and the academic have both realized recently the importance of corporate governance . The issue of establishing independent directors and independent supervisors becomes the focus of the debates. Most of the debates are based on the views of administrational and legal perspectives; little is found to discuss the issue from empirical analysis. The ownership of the listed companies in TSE is generally clustered in a few blockholdors. Therefore, the emphasis of corporate governance in Taiwan is to ensure the rights and interests of the minority shareholders and other related parties. In particular, how to prevent companies from creating arm’s-length transactions and/or illegal disposal of companies’ assets is vital to successful corporate governance (Feng chen Fu, 2004). Chen and Jaggi (2000) find that independent directors can promote the quality of the disclosures of financial information. However, Beasley (1996) finds that independent director will lower the quality of financial reporting if the independent director holds multiple directorships. This study examines whether independent directors and independent supervisors hold multiple directorships or supervisorships influence the quality of financial reporting. First, I discuss the unreasonableness of current regulations on the independent directors and independent supervisors holding multiple independent directorships and/or independent supervisorships. Second, I investigate the relation between the the quality of the financial reporting and the holding of multiple directorships or supervisorships. Finally, I propose feasible suggestions on dual overseeing system based on my empirical results. The empirical results suggest that the current regulation on independent directors and independent supervisors holding multiple independent directorships or independent supervisorships obviously is unreasonable. Moreover, independent supervisors are comparatively exerting a greater influence on the quality of financial reporting than that of the independent directors.