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NON-COMPLIANCE WITH AUSTRALIAN STOCK EXCHANGE RECOMMENDATIONS ON BOARD INDEPENDENCE

Patricia O’Keefe

DOI: 10.22495/cbv7i3art2

Abstract

An agency theory perspective is adopted to explain the high levels of non-compliance with recommendations concerning board structure of the Australian Stock Exchange’s (ASX) Corporate Governance Principles and Recommendations. The study compares groups of compliers and non-compliers drawn from members of the ASX All Ordinaries Index. The results indicate that, in the presence of mitigating factors such as less complexity, higher levels of managerial ownership of equity and higher ownership concentration, entities are less likely to comply with the recommendations on board independence. The results suggest that the compliance decision might be influenced by mitigating factors that reduce the need for board independence.

Keywords: Board Composition, Corporate Governance, Agency Theory, Corporate Governance Codes

How to cite this paper: O’Keefe, P. (2011). Non-compliance with Australian stock exchange recommendations on board independence. Corporate Board: role, duties and composition, 7(3), 21-37. http://doi.org/10.22495/cbv7i3art2

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