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사외이사의 독립성과 기업가치

  • 강윤식 한국기업지배구조원 연구위원
  • 국찬표 전)서강대학교 경영대학 교수
본 연구는 사외이사를 독립적인 사외이사와 우호적인 사외이사로 구분하여 독립적인 (우호적인) 사외이사가 기업가치에 미치는 영향을 실증적으로 분석함으로써 사외이사 독립성 제고의 필요성을 강조하고자 하였다. 분석결과에 따르면 독립적인 사외이사의 비율이 높아 이사회 독립성의 수준이 높은 기업일수록 기업가치가 높게 나타났지만, 우호적인 사외이사 비율은 기업가치에 부정적인 영향을 미치거나 영향을 미치지 않는 것으로 나타났다. 그리고 기업특성에 따라 독립적인(우호적인) 사외이사가 기업가치에 미치는 영향을 분석한 결과에 따르면 일부 기업특성에서는 독립적인 사외이사의 비율 변수와 기업특성 변수 간의 교차변수가 통계적으로 유의한 양의 값으로 나타나 독립적인 사외이사 비율이 높아 이사회 독립성의 수준이 높은 기업일수록 기업가치가 높게 나타났지만, 반면에 일부 기업특성에서는 우호적인 사외이사의 비율 변수와 기업특성 변수 간의 교차변수가 통계적으로 유의한 음의 값으로 나타나 우호적인 사외이사 비율이 높아 이사회 독립성의 수준이 낮은 기업일수록 기업가치는 낮게 나타났다.
독립적 사외이사,우호적 사외이사,이사회의 독립성,기업가치,기업특성

The Effect of Independent Outside Directors on Firm Value

  • Yun Sik Kang
  • Chan Pyo Kook
Many corporate governance literatures emphasize the importance of outside directors’ monitoring role and their independence. Theoretically, board of directors performs crucial roles in modern corporations where ownership and management are separated. As fiduciaries of shareholders, outside directors monitor managers who may pursue their own interests. Hence, as an internal governance mechanism, the independence of outside directors is a crucial factor in determining the effectiveness of monitoring and disciplining the management. In spite of this theoretical background, previous empirical studies failed to show consistent evidences in support of the effect of outside directors. Perhaps the lack of consistency in proving an effect of outside directors on performance can be interpreted as an indication that they have failed to distinguish “independent” and “friendly” outside directors. If researchers do not correctly distinguish independent outside directors from those who are not, the effects of outside directors on firm value cannot be clearly discerned as positive effects of independent directors may get cancelled out by the potential negative effects of non-independent directors may have on the firm value on average. Unlike prior studies, this paper, using hand collected data on the independence of outside director, examines how independent or friendly outside directors affect firm value as the directors would engage in monitoring and supervising a firm’s management. For the empirical analysis, we classify outside directors as ‘friendly’ or ‘independent’ by more refined and strict definition of independence of outside directors. Using this data classified into independent or friendly outside directors, first, we test the effect of independent (or friendly) outside directors on firm value. And then, we test whether the effect of independent (or friendly) outside directors on firm value varies with firm characteristics. Through these tests, we hope to verify that the value of outside directors depends on their independence alone. That is to say, the purpose of this paper is to provide new empirical evidence of the effectiveness of outside directors by focusing on the value of their independence in job performance. Our main finding supports that independent outside directors have a significant and positive effect on firm value. But friendly outside directors have either negative or no influence on the firm value. This result implies that independent outside directors play a pivotal role in enhancing firm value. We also explore how the relationship between the board independence and firm characteristics affect firm value. For this test, we run regression analysis using the interaction terms between board independence and the firm characteristics. According to the results about the effect of independent outside directors on firm value depending on firm characteristics, the firms with a longer corporate history, the higher level of capital expenditure, advertisement expenses, selling and management cost, the competitiveness in the industry, free cash flow and possibility of agency problems has more positive valuation effect of board independence. In other words, the interaction terms between the ratio of the independent outside directors variable and some of firm characteristics variables are positive and statistically significant in some firms’ characteristics. However, given the ratio of friendly board members who have school or business ties with management or with the firm, firm value is lower when firms have the higher level of leverage, sales growth rate, volatility of equity returns, and ratio of fixed assets. In other words, the interaction terms between the ratio of friendly outside directors variable and some of firm characteristics variables are negative and statistically significant in some others firms’ characteristics. This result implies that independent outside directors are very important on firm value in Korea regardless of firm characteristics. And finally, to mitigate the endogeneity problem and to check robustness of our previous results, we conduct additional tests as follows: First, to check robustness of our previous results, we run regression analysis using the alternative definition for independent outside director. The results using new definition are consistent with our previous results. Second, to deal with endogeneity problem, we run regression analysis using the data which show the change of the ratio of independent outside directors in board composition. By this regression, we are able to capture the importance of independence of BOD directly. This method can mitigate the endogeneity problem that has hampered previous attempts to estimate the effect of board independence. The results are consistent with our previous results. Third, to address the endogeneity problem caused by reverse causality, we run reverse regression by changing explanatory variables with dependent variables. According to the result, tobin’s Q doesn’t affect the level of board independence. Consequently, we confirm that our result is robust. In short, our results imply that the effectiveness of the boards’ monitoring role depends on their independence and the independence of outside directors is important for enhancing firm value. All in all, this empirical evidence suggests that Korean listed companies should reinforce the independence of board of directors by appointing independent outside directors to improve the firm value and correct the current problems with outside director system. As shown, our study contributes to the literature by promoting enhanced understanding about the crucial effect the independence of outside board members have on improving firm value.
Independent Outside Directors,Friendly Outside Directors,Board Independence,Firm Value,Firm Characteristics