이사회의 독립성 및 전문성과 투자효율성

In this study, we investigate whether board characteristics are associated with a firm’sinvestment efficiency. The board of directors play significant roles in a firm's investmentactivities because they participate in major investment decisions, advise management, andperform monitoring activities (Fama and Jensen 1983).In Korea, for the purpose of improvingcorporate governance, all companies listed in Korea Stock Exchange (KSE) were required tonominate outside directors in their boards from 1998, and the scope was extended to firmslisted in Korea Securities Dealers Automated Quotation(KOSDAQ) in 2001. Despite theseefforts, however, the notion that the board of directors do not play effective roles in a firm'sdecision making processes still exists. This study investigates the effectiveness of outsidedirectors by examining whether the board independence and expertise play a role in improvinginvestment efficiency. The empirical analyses of this study are based on 3,752 firm-year observations listed in KSEand KOSDAQ from 2001 to 2009. Following Biddle et al.(2009), the decrease in over orunder-investment is defined as the improvement of investment efficiency. Board independenceis measured as 1) the ratio of outside directors to total directors and 2) the ratio of graydirectors to outside directors. Gray directors represent ones who have worked at the same firmas former executives. Board expertise is measured as 1) the ratio of independent directors whoare also outside directors of other firms or have experience as outside directors in the past and2) the ratio of independent board members who have investment expertise. The results show that board characteristics have no significant relation to a firm’s investmentefficiency. In Korea, outside directors are required to monitor major shareholders due to theincomplete separation of owners and management. However, major shareholders and their relativesinfluence the nomination process of outside directors, making difficult to ensure effectiveindependence. In addition, outside directors are not motivated for showing their ability becausethere is no fair and effective compensation system for their expertise in Korea. The findings ofthis study suggest that outside directors generally do not effectively monitor managers withrespect to investment activities, implying that reforming the system regarding outside directorsis necessary to improve its effectiveness in Korea.