COMMITTEES OF BOARDS: AN EVENT STUDY ON AN EMERGING MARKET

Abstract

This study investigates the market reaction surrounding the establishments of committees of boards, and director appointments to these committees based on the underlying reason for the appointments in public firms quoted at the Borsa Istanbul. In addition, it investigates how the market reaction changes based on the professional expertise of these directors. The findings suggest that investors in Turkish capital markets do not value the existence of various committees of boards highly. In addition, they do not appear to react differently to director appointments to these committees based on the underlying reasons for the appointments. Lastly, they do not seem to value the professional expertise of directors serving on these committees, except in the case of audit committees. Investor reaction surrounding the appointments of expert directors to audit committees is significantly higher compared to the appointments of non-expert directors to audit committees.

References

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