Independent Directors' Board Network And Compensation

Due to the constant financial crises in recent years,regulatory authorities around the world have encouraged enterprises to strengthen their corporate governance and have advocated establishing the system of independent directors.This research investigates the relationship 'between independent directors' social network and their compensation.Using data of the board network at listed financial companies during 2013-2015 in Taiwan,this study quantifies the density of entire network relationship based on network centrality measures.We draw the universe network among the directors at finance companies publicly listed in Taiwan and statistically identify the clustering groups.The conclusion contends that:(1)political connections are important,as directors at innermost of whole network have political connections relating to government supervisory units,(2)companies compensate the independent directors who have higher network centrality more,(3)independent directors' salaries are not sensitive to firms' performance,and(4)firms with higher leverage and with board member having low portion of shares tend to compensate independent directors more.