Abstract
The purpose of the paper is to explore the impact of firm risk on board independence, typically the proportion of non-executive directors. Our sample is based on a panel data of publicly listed firms on Vietnamese stock markets over a ten-year period (2007-2016). By applying dynamic generalized method of moments estimators, the results are robust to endogeneity issues and highlight the U-shaped nonlinear impact of firm risk on non-executive director ratio. In addition, because the lack of information transparency in Vietnamese enterprises caused many risks for investors, the government issued the Circular 121/2012/TT-BTC dated July 26, 2012 on corporate governance applicable to public companies, which enhanced changes in the board structure of listed companies. Under the pressure of this regulation, high-risk companies increased the proportion of non-executive directors.© 2015, School of Accounting and Management, National Autonomous University of Mexico. All rights reserved. Publication of the article implies full assignment of property rights (copyright) in Journal of Accounting and Management. The publication mreserves the right to total or partial reproduction of the work in other print, electronic or any other alternative means, but always recognizing its responsibility.
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