Firms' performance following the initial resignation of independent directors: evidence from Taiwan

This study investigates the operating performance of firms listed on the Taiwan stock exchange following the initial resignation of independent directors. The results show that the firms' operating performance following the resignation of these directors has not only deteriorated, but is also significantly below the industry average. In addition, firms with a relatively severe agency problem, including firms that have lower insider or institutional shareholdings, receive audit opinions other than unqualified opinions or change their auditors prior to the resignation of the independent directors, tend to perform more poorly following the resignation.