Abstract

This study examines the voting behavior of independent directors of public companies in China from 2004–2012. The unique data at the individual-director level overcome endogeneity in both board formation and proposal selection by allowing analysis based on within-board proposal variation. Career-conscious directors, measured by age and the director's reputation value, are more likely to dissent; dissension is eventually rewarded in the marketplace in the form of more outside directorships and a lower risk of regulatory sanctions. Director dissension improves corporate governance and market transparency primarily through the responses of stakeholders (shareholders, creditors, and regulators), to whom dissension disseminates information.

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Citation

Jiang, Wei, Hualin Wan, and Shan Zhao. "Reputation Concerns of Independent Directors: Evidence from Individual Director Voting." Review of Financial Studies 29, no. 3 (2016): 655-696.

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