Services on Demand
Journal
Article
Indicators
Cited by SciELO
Access statistics
Related links
Cited by Google
Similars in SciELO
Similars in Google
Share
Revista Finanzas y Política Económica
Print version ISSN 2248-6046
Abstract
LAGOS CORTES, Diógenes and RACHID, Rolando Roncancio. Management Board Independence and Financial Performance: Evidence from Colombian Firms. Finanz. polit. econ. [online]. 2021, vol.13, n.1, pp.171-196. Epub July 08, 2021. ISSN 2248-6046. https://doi.org/10.14718/revfinanzpolitecon.v13.n1.2021.8.
This work aims to analyze the relationship between board independence and financial performance (variables ROA, ROE, and Tobin's Q). Two perspectives on independence were used: (a) Law 964 of 2005 (mandatory in the Colombian stock market) and (b) an expanded view that included business relationships (cross-directorships, seniority on the board), financial relationships (compensation packages, ownership participation), and personal relationships (founders, members of the owner family) as factors that limit independence. Regression models (random effects) were used on an unbalanced data panel composed of 69 companies from the Colombian Stock Exchange. The results showed that a more rigorous definition of independence is better appreciated by the market. It was found that board independence does not affect accounting performance (ROA and ROE), but it does affect market performance (Tobin's Q).
Keywords : Corporate governance; board of directors; board independence; economic performance.