Abstract:
The Australian Stock Exchange's
Principles of Good Corporate
Governance and Best Practice
Recommendations require all listed
companies that do not have a
majority of independent directors to
explain their reasons. We show that
independent (outside) directors seem
to add value only where their firms
have substantial amounts invested
in growth options. In these
circumstances, outside directors add
significant value in their first year
on the board and where they have
at least three other board positions.
