Discussion Paper Series 2018 #03: Professionals On Corporate Boards In Japan: How Do They Affect The Bottom Line?


Licensed professionals, such as accountants and lawyers, play a variety of roles when they sit on corporate boards. This paper sheds light on what role professional-directors play under what circumstances, and its consequences for corporate performance. We develop a theory that links professional roles (as cops, counsel, or entrepreneur) to antecedents in terms of external environment (notably the extent of government regulation) and to consequences for firm performance (profitability, corporate valuation, and stock return volatility). Using a data of all publicly quoted companies in Japan during 2004-2015, we demonstrate that the presence of professional-directors increases profitability and corporate valuation in all sectors, and that they contribute to higher stock return volatility in regulated and lower volatility in less regulated industries. The differential impacts of professional roles on firm performance – by acting as ‘entrepreneur’ in regulated industries and as ‘cops’ in non-regulated industries – have implications for board composition and board effectiveness. We provide discussion of the implications in the context of corporate governance reforms in Japan.


Read the full paper

Vous aimerez aussi...

Laisser un commentaire

Votre adresse e-mail ne sera pas publiée.

Ce site utilise Akismet pour réduire les indésirables. En savoir plus sur comment les données de vos commentaires sont utilisées.

Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search