FAMILY VOTING RIGHTS, BOARD CHARACTERISTICS, AND SHAREHOLDER VALUE: THE EMPIRICAL EVIDENCE FROM INDONESIAN PUBLIC LISTED COMPANIES

Saiful, Saiful (2014) FAMILY VOTING RIGHTS, BOARD CHARACTERISTICS, AND SHAREHOLDER VALUE: THE EMPIRICAL EVIDENCE FROM INDONESIAN PUBLIC LISTED COMPANIES. The Indonesian Jurnal of Accounting Research, 14 (2). pp. 1-26. ISSN 2086-6887

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Abstract

This study examines the relationship between board of director characteristics and shareholder value. Moreover, this study also investigates the moderating role of family voting rights on the relationship between proportion of independent member on board and shareholder value. Based on 88 samples of Indonesian public listed companies for periods 2002 to 2005 (352 observations) and using random effect panel data analysis,the results showed that the proportion of independent member on board is positively significant associated with shareholder value. It means that the role of independent board director in advising and monitoring management to act in the best interest of shareholders is effective whether in developed or in developing market including Indonesia. Furthermore, while this study also found that lower proportion of family voting rights lead to strengthen the positive relationship between independent board and shareholder value.

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