How does corporate control affect the appointment, auditing expertise and reputation of independent directors? Evidence from Taiwan

摘要

This study examines the influence of corporate control on the appointment and quality characteristics of independent directors. Our findings, based upon a dataset of related appointments within listed companies in Taiwan, suggest that the preferences of firms to voluntarily appoint independent directors has a positive association with the control right of the controlling shareholder, stemming from the cash flow rights, not from the deviation between ownership and control after decomposing the control. Most importantly, we find that the firms with high control right and cash flow rights of the controlling shareholders are likely to voluntarily appoint independent directors with good auditing expertise and reputation.