Work

Non‐executive directors and corporate risk‐taking: Evidence from China

Year: 2024

Type: article

Abstract: This study empirically examines the relationship between non‐executive directors and corporate risk‐taking. The findings show that non‐executive directors could significantly improve the risk‐taking level of corporations. Non‐executive directors reduce corporate agency costs and alleviate financing constraints, thus promoting a corporation's risk‐taking level. Further research shows that the positive impact of non‐executive directors on corporate risk‐taking is weakened by being state‐owned, higher executive incentives, better external supervision, higher ownership concentration, higher management age and greater uncertainty in the external environment. Additionally, non‐executive directors appointed by both controlling and non‐controlling shareholders play a positive role in promoting corporate risk‐taking.

Source: Accounting and Finance

DOI: 10.1111/acfi.13326

Authors: Siyu Zhang, Chao Lu

Institutions: Renmin University of China, Beijing Jiaotong University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

Funder: National Natural Science Foundation of China

Award: G4306510772