NDLI: Does the board of directors affect cash holdings? A study of French listed firms

Content Provider	Springer Nature Link
Author	Boubaker, Sabri Derouiche, Imen Nguyen, Duc Khuong
Copyright Year	2013
Abstract	Prior studies show that agency conflicts are important in explaining corporate financial policies and that the board of directors is central to corporate governance. In this study, we examine the role of this governing body in the accumulation of cash reserves. Using a sample of 597 French listed firms during 2001–2007, we find that firms with boards deemed to be effective in mitigating agency problems—that is, those appointing independent directors and splitting chief executive officer and chair positions—accumulate less cash reserves than those with less effective boards. Moreover, two-tier boards are more efficient in mitigating the agency costs of free cash flow, leading to less corporate cash hoarding. These findings support the idea that agency conflicts influence cash management policy and that effective boards of directors play an important disciplinary role in a concentrated ownership setting.
Starting Page	341
Ending Page	370
Page Count	30
File Format	PDF
ISSN	13853457
Journal	Journal of Management and Governance
Volume Number	19
Issue Number	2
e-ISSN	1572963X
Language	English
Publisher	Springer US
Publisher Date	2013-04-26
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Corporate governance Board of directors Agency costs Cash holdings Management/Business for Professionals Accounting/Auditing Industrial Organization Sociology
Content Type	Text
Resource Type	Article
Subject	Business and International Management

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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