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Journal of Business Ethics

, Volume 133, Issue 2, pp 375–393 | Cite as

Removing Vacant Chairs: Does Independent Directors’ Attendance at Board Meetings Matter?

  • Huilong Liu
  • Hong Wang
  • Liansheng WuEmail author
Article

Abstract

In this paper we investigate whether independent directors’ attendance at board meetings enhances investor protection using a difference-in-difference approach. We find that independent directors’ attendance alleviates tunneling. This effect is more pronounced in non-state-owned enterprises (non-SOEs) than in state-owned enterprises. The reinforcement of external supervision substitutes for the role of independent directors’ attendance and this substitution effect is more significant in non-SOEs. Together, these results imply that independent directors’ attendance at board meetings can play an important role in protecting investors, especially in non-SOEs and when external supervision is weak. This paper sheds new light on independent directors’ function in corporate governance, and has implications for institutional improvements.

Keywords

China Corporate governance Independent directors Investor protection 

Notes

Acknowledgments

We appreciate comments and suggestions from three anonymous reviewers. Huilong Liu and Liansheng Wu acknowledge financial support from the National Natural Science Foundation of China (Nos. 71202028, 71332007 and 71025003).

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.Business SchoolUniversity of International Business and EconomicsBeijingChina
  2. 2.Guanghua School of ManagementPeking UniversityBeijingChina

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