THE INDEPENDENT DIRECTORS � DEGREE OF INDEPENDENCE AND STOCK VALUATION AND PERFORMANCE: A STUDY OF SINGAPORE REAL ESTATE INVESTMENT TRUSTS

Abstract

This dissertation examines the degree of independence of independent directors as measured by the firm’s board composition of independent directors, average number of directorships and their shared tenure with CEO.

An analysis of data on independent directors from 22 Real Estate Investment Trusts (REITs) from 2002 to 2011 has revealed that overall, the independent directors in Singapore are found to be not independent when comparing their independence measures with national statistics from 2001 to 2005 and prior research findings in other countries.

Further examinations on the impact of independent directors’ degree of independence on the performance of REITs have found that throughout the studied period, their relationships are insignificant.

However, there is increasing significance of the impact of independence indices on REITs performance between sub-sample of data from 2003 to 2008 and data from 2009 to 2011, and the independent directors’ number of directorships has found to have negative impact on the performance of REITs from 2009 to 2011.