Skip to main content
SpringerLink
Log in

Does board committee independence affect financial distress likelihood? A comparison of China with the UK

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

This study explores the relationship between board committees’ independence and the financial distress of firms in China and the UK. Akin to previous literature, we estimate this relationship between 2007 and 2016 using a conditional logit model on a sample of matched pair firms. For China, the results indicate a positive and statistically significant association between the percentage of independent audit committee members and the financial distress of firms. In contrast, the opposite relationship was found for independent compensation and nomination committee members. For the UK, the relationships are the same, but the results are significant only for nomination committee independence. Our overall results suggest that independent audit committee members are not favorable for firm survival. In contrast, the independent compensation and nomination committee members are beneficial for the financial health of firms, as they are responsible for designing fair compensation packages and for selecting the most suitable persons to decide the strategic moves of the firm, respectively. A robustness test demonstrates that the results are robust to the assumed functional form imposed by the conditional logit model and confirms our core findings for both Chinese and UK firms.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Propensity Score Matching was performed using the user-written STATA module psmatch2.

  2. A caliper is the maximum tolerated difference in propensity score between matched firms. Following previous researches of Barbopoulos, Adra, and Saunders (2020), Leong and Yang (2020), Rijal and Khanna (2020), Majumdar and Bose (2019), Adra and Barbopoulos (2018), and Vithanage, Neupane, and Chung (2016), we used a caliper distance of 0.1 for PSM.

  3. The ivprobit command with two-step estimator in Stata13 was used.

  4. The weakiv command in Stata13 was used.

References

  • Adithipyangkul, P., Alon, I., & Zhang, T. (2011). Executive perks: Compensation and corporate performance in China. Asia Pacific Journal of Management, 28(2), 401–425.

  • Adra, S., & Barbopoulos, L. G. (2018). The valuation effects of investor attention in stock-financed acquisitions. Journal of Empirical Finance, 45, 108–125.

  • Agarwal, V., & Taffler, R. (2008). Does financial distress risk drive the momentum anomaly? Financial Management, 37(3), 461–484.

  • Aglietta, M., & Rebérioux, A. (2004). Dérives du capitalisme financier. In Le nouveau mur de l’argent. Essai sur la finance globalisée. Paris: Albin Michel); François Morin.

  • Agyemang-Mintah, P. (2015). The nomination committee and firm performance: An empirical investigation of UK financial institutions during the pre/post financial crisis. Corporate Board: Role, Duties and Composition, 11(3), 176–190.

  • Agyemang-Mintah, P., & Schadewitz, H. (2018). Audit committee adoption and firm value: evidence from UK financial institutions. International Journal of Accounting and Information Management, 26(1), 205–226.

  • Ashraf, S., Félix, E. G., & Serrasqueiro, Z. (2020). Development and testing of an augmented distress prediction model: A comparative study on a developed and an emerging market. Journal of Multinational Financial Management, 100659.

  • Alderman, H., Duncan, K., Kelly, S., & McNamara, R. (2011). Performance of family firms during the global financial crisis: does governance matter?. In 2012 Financial Markets & Corporate Governance Conference.

  • Almamy, J., Aston, J., & Ngwa, L. N. (2016). An evaluation of Altman’s Z-score using cash flow ratio to predict corporate failure amid the recent financial crisis: Evidence from the UK. Journal of Corporate Finance, 36, 278–285.

  • Altman, E. I. 1968. Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. The Journal of Finance, 23(4): 589-609.

  • Anderson, C. A., & Anthony, R. W. (1986). The new corporate directors. New York: John Wiley.

  • Anderson, R. C., & Bizjak, J. M. (2003). An empirical examination of the role of the CEO and the compensation committee in structuring executive pay. Journal of Banking and Finance, 27(7), 1323–1348.

  • Barbopoulos, L. G., Adra, S., & Saunders, A. (2020). Macroeconomic news and acquirer returns in M&As: The impact of investor alertness. Journal of Corporate Finance, 64, 101583.

  • Bathala, C. T., & Rao, R. P. (1995). The determinants of board composition: An agency theory perspective. Managerial and Decision Economics, 16(1), 59–69.

  • Baysinger, B., & Hoskisson, R. E. (1990). The composition of boards of directors and strategic control: Effects on corporate strategy. Academy of Management Review, 15(1), 72–87.

  • Beasley, M. S. 1996. An empirical analysis of the relation between the board of director composition and financial statement fraud. Accounting Review, 71(4): 443-465.

  • Beasley, M. S., Carcello, J. V., Hermanson, D. R., & Neal, T. L. (2009). The audit committee oversight process. Contemporary Accounting Research, 26(1), 65–122.

  • Beaver, W. H. 1966. Financial ratios as predictors of failure. Journal of Accounting Research, 4: 71-111.

  • Bonna, I., Yoshikawab, T., & Phan, P. H. (2004). Effects of board structure on firm performance: A comparison between Japan and Australia. Asian Business and Management, 3(1), 105–125.

  • Brédart, X. 2014. Financial distress and corporate governance: The impact of board configuration. International Business Research, 7(3): 72.

  • Brickley, J. A., Coles, J. L., & Jarrell, G. A. (1997). Corporate Leadership Structure: On The Separation of the Positions of CEO and Chairman of the Board. Journal of Corporate Finance, 3(3), 189–220.

  • Buck, T., Liu, X., & Skovoroda, R. (2008). Top executive pay and firm performance in China. Journal of International Business Studies, 39(5), 833–850.

  • Carcello, J. V., & Neal, T. L. (2000). Audit committee composition and auditor reporting. The Accounting Review, 75(4), 453–467.

  • Chaganti, R. S., Mahajan, V., & Sharma, S. (1985). Corporate board size, composition and corporate failures in retailing industry. Journal of Management Studies, 22(4), 400–417.

  • Chambers, A. 2005a. A teddy bears' picnic or the lion's ring? Do non-executive directors add value? Measuring Business Excellence, 9(1): 23-34.

  • Chambers, A. D. 2005b. Audit committees: practice, rules and enforcement in the UK and China. Corporate Governance: an international review, 13(1): 92-100.

  • Chang, S. J., Chung, J., & Moon, J. J. (2013). When do foreign subsidiaries outperform local firms? Journal of international business studies, 44(8), 853–860.

  • Chatterjee, S., & Hadi, A. S. (2015). Regression analysis by example. John Wiley & Sons.

  • Chen, H. H. 2008. The timescale effects of corporate governance measure on predicting financial distress. Review of Pacific Basin Financial Markets and Policies, 11(01): 35-46.

  • Claessens, S., Djankov, S., & Xu, L. C. (2000). Corporate performance in the East Asian financial crisis. The World Bank Research Observer, 15(1), 23–46.

  • Clark, M.H. 2015. Propensity Scoring. In Smelser, N. J., and Baltes, P. B. (Eds.). (2001). International encyclopedia of the social & behavioral sciences (Vol. 19). Second edition, Amsterdam: Elsevier, 140-146.

  • Cohen, J., Gaynor, L. M., Krishnamoorthy, G., & Wright, A. M. (2007). Auditor communications with the audit committee and the board of directors: Policy recommendations and opportunities for future research. Accounting Horizons, 21(2), 165–187.

  • Cohen, J., Krishnamoorthy, G., & Wright, A. (2010). Corporate governance in the post-Sarbanes-Oxley era: Auditors’ experiences. Contemporary Accounting Research, 27(3), 751–786.

  • Cohen, J., Krishnamoorthy, G., & Wright, A. M. (2002). Corporate governance and the audit process. Contemporary accounting research, 19(4), 573–594.

  • Cohen, J. R., Krishnamoorthy, G., & Wright, A. M. (2008). Form versus substance: The implications for auditing practice and research of alternative perspectives on corporate governance. Auditing: A Journal of Practice & Theory, 27(2), 181–198.

  • Conyon, M., Gregg, P., & Machin, S. (1995). Taking care of business: Executive compensation in the United Kingdom. The Economic Journal, 105(430), 704–714.

  • Conyon, M. J., & He, L. (2004). Compensation Committees and CEO Compensation Incentives in US Entrepreneurial Firms. Journal of Management Accounting Research, 16(1), 35–56.

  • Conyon, M. J., & He, L. (2011). Executive compensation and corporate governance in China. Journal of Corporate Finance, 17(4), 1158–1175.

  • Cornett, M., Marcus, A., & Tehranian, H. (2008). Corporate governance & pay-for-performance: the impact of earnings management. Journal of Financial Economics, 87(2), 357–373.

  • Daily, C. M., Dalton, D. R., & Cannella, A. A. (2003). Corporate governance: Decades of dialogue and data. Academy of management review, 28(3), 371–382.

  • Daily, C. M., & Dalton, D. R. (1994). Corporate governance and the bankrupt firm: An empirical assessment. Strategic Management Journal, 15(8), 643–654.

  • Dalton, D. R., & Kesner, I. F. (1987). Composition and CEO duality in boards of directors: An international perspective. Journal of International Business Studies, 18(3), 33–42.

  • Dalton, D. R., & Daily, C. M. (1999). What's wrong with having friends on the board. Across the Board, 36(3), 28–32.

  • Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20–47.

  • DeFond, M. L., Wong, T. J., & Li, S. H. (1999). The impact of improved auditor independence on audit market concentration in China. Journal of Accounting & Economics, 28(3), 269–305.

  • Dey, A. 2008. Corporate governance and agency conflicts. Journal of accounting research, 46(5): 1143-1181.

  • Diamond, D. W. (1984). Financial intermediation and delegated monitoring. The Review of Economic Studies, 51(3), 393–414.

  • Dignam, A. J., & Hicks, A. (2011). Hicks & Goo's cases and materials on company law (6th ed.). USA: Oxford university press.

  • Donaldson, L., & Davis, J. H. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16(1), 49–64.

  • Donker, H., Santen, B., & Zahir, S. (2009). Ownership structure and the likelihood of financial distress in the Netherlands. Applied Financial Economics, 19, 1687–1696.

  • Eisenhardt, K. M. 1989. Agency theory: An assessment and review. Academy of Management Review, 14(1): 57-74.

  • Elloumi, F., & Gueyie, J. P. (2001). Financial distress and corporate governance: an empirical analysis. Corporate Governance: The International Journal of Business in Society, 1(1), 15–23.

  • Erkens, D. H., Hung, M., & Matos, P. (2012). Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide. Journal of corporate finance, 18(2), 389–411.

  • Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301–325.

  • Fauzi, F., & Locke, S. (2012). Board structure, ownership structure and firm performance: A study of New Zealand listed-firms. Asian Academy of Management Journal of Accounting and Finance, 8(2), 43–67.

  • Fich, E. M., & Slezak, S. L. (2008). Can corporate governance save distressed firms from bankruptcy? An empirical analysis. Review of Quantitative Finance and Accounting, 30(2), 225–251.

  • Finlay, K., Magnusson, L. M., & Schaffer, M. E. (2013). weakiv: Weak-instrument-robust tests and confidence intervals for instrumental-variable (IV) estimation of linear, probit and tobit models. Available at http://ideas.repec.org/c/boc/bocode/s457684.html. Accessed 20 March 2020.

  • Forker, J. J. 1992. Corporate governance and disclosure quality. Accounting and Business Research, 22(86): 111-124.

  • Fung, S., & Tsai, S. C. (2012). Institutional ownership and corporate investment performance. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l'Administration, 29(4), 348–365.

  • Garg, A. K. 2007. Influence of Board Size and Independence on Firm Performance: A Study of Indian Companies. Vikalpa, 32(3): 39-60.

  • Gendron, Y., & Bedard, J. (2006). On the Constitution of Audit Committee Effectiveness, Accounting. Organisation and Society, 31(3), 211–239.

  • Geng, R., Bose, I., & Chen, X. (2015). Prediction of financial distress: An empirical study of listed Chinese companies using data mining. European Journal of Operational Research, 241(1), 236–247.

  • Gilson, S. C. 1990. Bankruptcy, boards, banks, and blockholders: Evidence on changes in corporate ownership and control when firms default. Journal of Financial Economics, 27(2): 355-387.

  • Globerman, S., Peng, M. W., & Shapiro, D. M. (2011). Corporate governance and Asian companies. Asian Pacific Journal of Management, 28(1), 1–14.

  • Goodstein, J., Gautam, K., & Boeker, W. (1994). The effect of board size & diversity on strategic change. Strategic Management Journal, 15(3), 241–250.

  • Hadani, M., Goranova, M., & Khan, R. (2011). Institutional investors, shareholder activism, and earnings management. Journal of Business Research, 64(12), 1352–1360.

  • Hambrick, D. C., & D'Aveni, R. A. (1988). Large corporate failures as downward spirals. Administrative Science Quarterly, 1–23.

  • Harris, M., & Raviv, A. (1991). The theory of capital structure. Journal of Finance, 46(1), 297–356.

  • Hatane, S. E., Chandra, N., & Tarigan, J. (2019). Board structures and managerial ownership in identifying the financial distress likelihood. Atlantis Press: Doctoral dissertation.

  • Haveman, H. A., Jia, N., Shi, J., & Wang, Y. (2017). The dynamics of political embeddedness in China. Administrative Science Quarterly, 62(1), 67–104.

  • Herdan, A., & Szczepańska, K. (2011). Directors remuneration and companies' performance the comparison of listed companies in Poland and UK. Foundations of Management, 3(2), 41–54.

  • Hermalin, B. E., & Weisbach, M. S. (2003). Boards of directors as an endogenously determined institution: A survey of the economic literature. Economic Policy Review, 9(April), 7–26.

  • Hsu, H. H., & Wu, Y. H. (2010). Board composition, ‘grey directors’ and the incidences of corporate failure in the UK. Finance and Corporate Governance Conference 2010 Paper.

  • Hui, H., & Jing-Jing, Z. (2008). Relationship between corporate governance and financial distress: An empirical study of distressed companies in China. International Journal of Management, 25(4), 654.

  • Ivanova, M.R. 2017. Institutional investors as stewards of the corporation: Exploring the challenges to the monitoring hypothesis. Business Ethics: A European Review, 26(2): 175-188

  • Jensen, M. C. 1993. The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3): 831-880.

  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.

  • Johnson, S., Boone, P., Breach, A., & Friedman, E. (2000). Corporate governance in the Asian financial crisis. Journal of Financial Economics, 58(1-2), 141–186.

  • Judge Jr., W. Q., & Zeithaml, C. P. (1992). Institutional and strategic choice perspectives on board involvement in the strategic decision process. Academy of Management Journal, 35(4), 766–794.

  • Kiel, G. C., & Nicholson, G. J. (2003). Board composition and corporate performance: How the Australian experience informs contrasting theories of corporate governance. Corporate Governance: An International Review, 11(3), 189–205.

  • Klein, A. 1998. Firm performance and board committee structure. The Journal of Law and Economics, 41(1): 275-304.

  • Laitinen, E. K., & Laitinen, T. (2009). Audit report in payment default prediction: A contingency approach. International Journal of Auditing, 13(3), 259–280.

  • Lajili, K., & Zéghal, D. (2010). Corporate governance and bankruptcy filing decisions. Journal of General Management, 35(4), 3–26.

  • Lamberto, A. P., & Rath, S. (2010). The survival of initial public offerings in Australia. International Journal of Business and Finance Research, 4(4), 133–147.

  • Lee, T. S., & Yeh, Y. H. (2004). Corporate governance and financial distress: Evidence from Taiwan. Corporate governance: An international review, 12(3), 378–388.

  • Lee, S. K., Bosworth, W., & Kudo, F. (2016). Compensation committees: independence and firm performance. Managerial Finance, 42(1), 23–33.

  • Lemmon, M. L., & Lins, K. V. (2003). Ownership structure, corporate governance, and firm value: Evidence from the East Asian financial crisis. The journal of finance, 58(4), 1445–1468.

  • Leong, C. K., & Yang, Y. C. (2020). Constraints on “Doing Good”: Financial constraints and corporate social responsibility. Finance Research Letters, 101694.

  • Leung, P., Coram, P., & Cooper, B. (2007). Modern auditing & assurance services. Australia: John Wiley & Sons.

  • Li, Z., Crook, J., & Andreeva, G. (2014). Chinese companies distress prediction: an application of data envelopment analysis. Journal of the Operational Research Society, 65(3), 466–479.

  • Lin, C. 2001. Corporatisation and corporate governance in China's economic transition. Economics of planning, 34(1-2): 5-35.

  • Lin, Y. R., & Fu, X. M. (2017a). Does institutional ownership influence firm performance? Evidence from China. International Review of Economics & Finance, 49, 17–57.

  • Lin, Y. R., & Fu, X. M. (2017b). Does institutional ownership influence firm performance? Evidence from China. International Review of Economics & Finance, 49, 17–57.

  • Lipton, M., & Lorsch, J. W. (1992). A modest proposal for improved corporate governance. The business lawyer, 48(1), 59–77.

  • Liu, G. S. 2005. Comparative Corporate Governance: the experience between China and the UK. Corporate Governance: An International Review, 13(1): 1-4.

  • Lublin, J.S., and Macdonald, E. (1998). Recent scandals signal laxity of company’s audit panels. The Wall Street Journal, 17 July. http://www.wsj.com/articles/SB90063705913218000.

  • Majumdar, A., & Bose, I. (2019). Do tweets create value? A multi-period analysis of Twitter use and content of tweets for manufacturing firms. International Journal of Production Economics, 216, 1–11.

  • Mallette, P., & Fowler, K. L. (1992). Effects of board composition and stock ownership on the adoption of “poison pills”. Academy of Management journal, 35(5), 1010–1035.

  • Mallin, C. A. (2011). Handbook on international corporate governance: country analyses (2nd ed.). Uk: Edward Elgar Publishing.

  • Manzaneque, M., Merino, E., & Priego, A. M. 2016. The role of institutional shareholders as owners and directors and the financial distress likelihood. Evidence from a concentrated ownership context. European Management Journal, 34(4): 439-451.

  • Manzaneque, M., Merino, E., & Priego, A. M. (2016a). The role of institutional shareholders as owners and directors and the financial distress likelihood. Evidence from a concentrated ownership context. European Management Journal, 34(4), 439–451.

  • Manzaneque, M., Priego, A. M., & Merino, E. (2016b). Corporate governance effect on financial distress likelihood: Evidence from Spain. Revista de Contabilidad, 19(1), 111–121.

  • McGuinness, P. B., Vieito, J. P., & Wang, M. (2019). Proactive government intervention, board gender balance, and stakeholder engagement in China and Europe. Asia Pacific Journal of Management, 1–44.

  • McGurr, P., & DeVaney, S. (1998). Predicting business failure of retail firms: An analysis using mixed industry models. Journal of Business Research, 43(3), 169–176.

  • McMullen, D. A., & Raghunandan, K. (1996). Enhancing audit committee effectiveness. Journal of Accountancy, 182(2), 79.

  • Mohid Rahmat, M., Mohd Iskandar, T., & Mohd Saleh, N. (2009). Audit committee characteristics in financially distressed and non-distressed companies. Managerial Auditing Journal, 24(7), 624–638.

  • Mitton, T. 2002. A cross-firm analysis of the impact of corporate governance on the East Asian financial crisis. Journal of financial economics, 64(2): 215-241.

  • Mselmi, N., Hamza, T., Lahiani, A., & Shahbaz, M. (2019). Pricing corporate financial distress: Empirical evidence from the French stock market. Journal of International Money and Finance, 96, 13–27.

  • Nahar Abdullah, S. 2006. Board structure and ownership in Malaysia: The case of distressed listed companies. Corporate Governance: The International Journal of Business in Society, 6(5): 582-594.

  • Ohlson, J. A. 1980. Financial ratios and the probabilistic prediction of bankruptcy. Journal of Accounting Research, 18(1): 109-131.

  • Pearce, J. A., & Zahra, S. A. (1992). Board composition from a strategic contingency perspective. Journal of Management Studies, 29(4), 411–438.

  • Peasnell, K. V., Pope, P. F., & Young, S. (2001). The characteristics of firms subject to adverse rulings by the Financial Reporting Review Panel. Accounting and Business Research, 31(4), 291–311.

  • Peng, M. W., Bhagat, R. S., & Chang, S.-J. (2010). Asia and global business. Journal of International Business Studies, 41(3), 373–376.

  • Peng, M. W., Zhang, S., & Li, X. (2007). CEO duality and firm performance during China's institutional transitions. Management and Organization Review, 3(2), 205–225.

  • Petra, S. T. 2005. Do outside independent directors strengthen corporate boards? Corporate Governance: The International Journal of Business in Society, 5(1): 55-64.

  • Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. American Journal of Sociology, 87(3), 757–759.

  • Puni, A. 2015. Do board committees affect corporate financial performance? Evidence from listed companies in Ghana. International Journal of Business and Management Review, 3(5): 14-25.

  • Reddy, K., Locke, S., Scrimgeour, F., & Gunasekarage, A. (2008). Corporate governance practices of small cap companies and their financial performance: an empirical study in New Zealand. International Journal of Business Governance and Ethics, 4(1), 51–78.

  • Rijal, B., & Khanna, N. (2020). High priority violations and intra-firm pollution substitution. Journal of Environmental Economics and Management, 103, 102359.

  • Rose, C. 2007. Does female board representation influence firm performance? The Danish evidence. Corporate Governance: An International Review, 15(2), 404-413.

  • Rutherford, M. A., & Buchholtz, A. K. (2007). Investigating the relationship between board characteristics and board information. Corporate Governance: An International Review, 15(4), 576–584.

  • Sabbaghi, O. (2016). Corporate governance in China: A review. Corporate Governance: The International Journal of Business in Society, 16(5), 866–882.

  • Salloum, C., Azzi, G., & Gebrayel, E. (2014). Audit committee and financial distress in the Middle East context: Evidence of the Lebanese financial institutions. International Strategic Management Review, 2(1), 39–45.

  • Saputri, L., & Asrori, A. (2019). The effect of leverage, liquidity and profitability on financial distress with the effectiveness of the audit committee as a moderating variable. Accounting Analysis Journal, 8(1), 38–44.

  • Schultz, E., Tan, C., & Walsh, K. D. (2017). Corporate Governance and the Likelihood of Default. Accounting & Finance, 57, 235–253.

  • Shleifer, A., & Vishny, R. W. (1986). Large Shareholders and Corporate Control. Journal of Political Economy, 94(3, Part 1), 461–488.

  • Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737.

  • Shumway, T. 2001. Forecasting bankruptcy more accurately: A simple hazard model. The Journal of Business, 74(1): 101-124.

  • Simpson, W. G., & Gleason, A. E. (1999). Board structure, ownership, and financial distress in banking firms. International Review of Economics & Finance, 8(3), 281–292.

  • Spira, L. F. 2003. Audit committees: begging the question? Corporate Governance: An International Review, 11(3): 180-188.

  • Sun, Q., Tong, W. H. S., & Tong, J. (2002). How does government ownership affect firm performance? Evidence from China’s privatization experience. Journal of Business Finance and Accounting, 29(1–2), 1–27.

  • Tabachnick, B. G., & Fidell, L. S. (1996). Using multivariate statistics. Northridge. Cal.: Harper Collins.

  • Tricker, B., & Li, G. (2019). Understanding corporate governance in China. Hong Kong: Hong Kong University Press.

  • Vafeas, N. (1999). The nature of board nominating committees and their role in corporate governance. Journal of Business Finance & Accounting, 26(1-2), 199–225.

  • Vafeas, N. 2000. Board Structure and the Informativeness of Earnings. Journal of Accounting and Public Policy, 19(2): 139-160.

  • Vafeas, N., & Theodorou, E. (1998). The Relationship between Board Structure and Firm Performance in the UK. The British Accounting Review, 30(4), 383–407.

  • Vithanage, K., Neupane, S., & Chung, R. (2016). Multiple lead underwriting syndicate and IPO pricing. International Review of Financial Analysis, 48, 193–208.

  • Wang, Z. J., & Deng, X. L. (2006). Corporate governance and financial distress: Evidence from Chinese listed companies. Chinese Economy, 39(5), 5–27.

  • Wei, G. (2007). Ownership Structure, Corporate Governance and Company Performance in China. Asia Pacific Business Review, 13(4), 519–545.

  • Weisbach, M. 1988. Outside directors & CEO turnover. Journal of Financial Economics, 20: 431–460.

  • Xu, X.N., and Y. Wang. 1997. Ownership structure, corporate governance, and firm’s performance. World Bank working paper. Available at http://documents1.worldbank.org/curated/en/801241468746710267/114514322_20041117145034/additional/multi-page.pdf, Accessed: February 10, 2020.

  • Yu, M. (2013). State ownership and firm performance: Empirical evidence from Chinese listed companies. China Journal of Accounting Research, 6(2), 75–87.

  • Zheng, D.H.H. 2015. Does ownership structure affect the degree of corporate financial distress in China? Journal of Accounting in Emerging Economies, 5(1): 35-60.

  • Zhu, Y., Tian, G. G., and Ma, S. 2009. Executive compensation, board characteristics and firm performance in China: the impact of compensation committee. In 22nd Australasian finance and banking conference.

Download references

Author information

Authors and Affiliations

  1. School of Technology and Management and CITUR-UMa, University of Madeira, Penteada University Campus, 9020-105, Funchal, Portugal

    Sumaira Ashraf

  2. Management Department and CEFAGE-UÉ, University of Évora, Largo dos Colegiais, n° 2, 7000-803, Évora, Portugal

    Elisabete G. S. Félix

  3. Management and Economics Department and CEFAGE-UBI, University of Beira Interior, Rua Marquês d’Ávila e Bolama, 6201-001, Covilhã, Portugal

    Zélia Serrasqueiro

Authors
  1. Sumaira Ashraf
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Elisabete G. S. Félix
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Zélia Serrasqueiro
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Sumaira Ashraf.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Ashraf, S., Félix, E.G.S. & Serrasqueiro, Z. Does board committee independence affect financial distress likelihood? A comparison of China with the UK. Asia Pac J Manag 39, 723–761 (2022). https://doi.org/10.1007/s10490-020-09747-5

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10490-020-09747-5

Keywords

Jel Classification

Search

Navigation