Diversity, outside directors and firm valuation: Korean evidence

This paper examines the relationship between the diversity of independent outside directors and the valuation of Korean firms after Koreaʹs 1998 corporate-governance reforms. First, the study finds consistent positive relationships between firm valuation and the proportion of independent outside directors with government experience, but finds negative relationships between firm valuation and the proportion of independent outside directors who are accountants. Second, the study finds that the diversity of independent outside directorsʹ academic majors or age has consistently positive effects on firm valuation. This result implies that not only the quantity but also the quality of independent outside directors affects the valuation of Korean companies.