The Value Relevance of D&O Insurance: the effect of Corporate Governance.

• Main Authors: Han-Li Huang, 黃瀚立
• Other Authors: Ching-Hsiang Lin
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/22920761702756996069

碩士 === 國立高雄第一科技大學 === 財務管理所 === 98 === Due to the frequent occurrence of financial fraud in Taiwan and abroad, the litigation risk for directors and officers is getting higher. In order to protect directors and officers and reduce the litigation risk, companies start to take out the D&O insurance policy. Previous study find companies with D&O insurance can help to supervise the directors and officers, and the demand of D&O insurance depend on litigation cost. The supervision of D&O insurance and litigation cost are related to corporate governance. This study investigates whether the information disclosure of D&O insurance has value relevance. We also investigate the effect of corporate governance on the relationship between D&O insurance and stock value. According to the empirical results, D&O insurance are value relevant. Further investigation find that corporate governance has effect on the relationship between D&O insurance and stock value. The conclusions are as follows : (1) The controlling stockholder cash flow rights have positive impact on the D&O insurance and stock value relationship. (2) Deviation of control rights from cash flow rights of the controlling shareholders has negative impact on the D&O insurance and stock value relationship. (3) The proportion of holding share with foreign institutional investors has positive impact on the D&O insurance and stock value relationship. (4) The scale of board of directors has negative impact on the D&O insurance and stock value relationship.