Voluntary appointment of independent directors: evidence from Taiwan

Purpose Using a data set of Taiwanese listed firms from 2002 to 2015, this paper aims examine the determinants voluntarily appoint independent directors. Design/methodology/approach This study uses panel estimation exploit both cross-section and time-series nature data. Further, Tobit regression, generalized linear model (GLM) in additional analysis two-stage least squares mitigate for possible endogeneity issue. Findings The main findings show that with large board sizes tend directors already have supervisors more willingly accept onto board. Furthermore, ownership concentration institutional are positively associated voluntary appointment On contrary, controlled by family members generally reluctant Research limitations/implications important managers, shareholders, creditors policymakers. In particular, when considering directors, results indicate supervisors, outside shareholders investors significant factors influencing effective internal external corporate governance mechanisms. research work focuses on It would be interesting compare effectiveness appointments mandatory within Taiwan other jurisdictions. Originality/value incrementally contributes literature several ways. First, extends earlier using comprehensive non-financial alternative methodologies investigate Second, prior studies neglect issue censored fractional dependent variable, proportion which might yield biased inconsistent parameter estimates ordinary regression estimation. Finally, addresses relevant econometric issues Tobit, GLM concern.