Lead independent director, managerial risk-taking and cost of debt: evidence from UK

Owusu, A, Kwabi, F, Owusu-Mensah, R ORCID: https://orcid.org/0000-0001-9748-9516 and Elamer, A, 2023. Lead independent director, managerial risk-taking and cost of debt: evidence from UK. Journal of International Accounting, Auditing and Taxation, 53: 100576. ISSN 1061-9518

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Abstract

We extend the existing literature on how the adoption of a lead independent director is related to corporate outcomes by documenting that the presence of a lead independent director on the board is significantly and negatively related to managerial risk-taking. The result is more pronounced for firms with a non-independent board chair. In a further analysis, we document that decreased managerial risk-taking leads to a reduction in cost of debt for firms with a lead independent director on the board. Overall, our results suggest that the adoption of a lead independent director is an effective governance mechanism when the board chair is not independent, which supports the motivation of the UK corporate governance code.

Item Type:	Journal article
Publication Title:	Journal of International Accounting, Auditing and Taxation
Creators:	Owusu, A., Kwabi, F., Owusu-Mensah, R. and Elamer, A.
Publisher:	Elsevier
Date:	December 2023
Volume:	53
ISSN:	1061-9518
Identifiers:	Number Type 10.1016/j.intaccaudtax.2023.100576 DOI 1756837 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Laura Ward
Date Added:	05 May 2023 10:23
Last Modified:	04 Oct 2023 08:17
URI:	https://irep.ntu.ac.uk/id/eprint/48883

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