Does board independence matter for corporate insurance hedging?

Zou, Hong, Adams, Mike and Xiao, Jason Zezhong ORCID: https://orcid.org/0000-0003-0703-6447 2012. Does board independence matter for corporate insurance hedging? Journal of Financial Research 35 (3) , pp. 451-469. 10.1111/j.1475-6803.2012.01324.x

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Abstract

We test the effect of board independence on corporate purchases of property insurance. We find that board independence increases the incidence of property insurance use but does not have a significant effect on the extent of property insurance use given that a firm decides to insure its assets. These findings are consistent with the argument that: (1) more independent boards view it necessary to have property insurance to manage asset-loss risks and (2) excessive insurance or insurance purchases induced by managerial risk aversion and/or self-interest does not benefit shareholders and so may not be supported by independent boards.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Schools > Business (Including Economics)
Subjects:	H Social Sciences > HJ Public Finance
Uncontrolled Keywords:	G22; G30; G32
Publisher:	Wiley
ISSN:	0270-2592
Last Modified:	24 Oct 2022 11:03
URI:	https://orca.cardiff.ac.uk/id/eprint/46804

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