Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis
We examine the association between board independence and restrictiveness of covenants in U.S. private debt contracts around the global financial crisis (GFC). We show that board independence is associated with less restrictive covenants suggesting lenders willingness to delegate some monitoring of...
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| Format: | Article |
| Language: | English English English |
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Blackwell Publishing
2020
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| Online Access: | http://irep.iium.edu.my/81638/ http://irep.iium.edu.my/81638/19/81638_Board%20monitoring%20and%20covenant%20restrictiveness%20in%20private_new.pdf http://irep.iium.edu.my/81638/2/81638_Board%20monitoring%20and%20covenant%20restrictiveness_SCOPUS.pdf http://irep.iium.edu.my/81638/3/81638_Board%20monitoring%20and%20covenant%20restrictiveness_WOS.pdf |
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| author | Abu Bakar, Intan Suryani Khan, Arifur Mather, Paul R. Tanewski, George A. |
| author_facet | Abu Bakar, Intan Suryani Khan, Arifur Mather, Paul R. Tanewski, George A. |
| author_sort | Abu Bakar, Intan Suryani |
| building | IIUM Repository |
| collection | Online Access |
| description | We examine the association between board independence and restrictiveness of covenants in U.S. private debt contracts around the global financial crisis (GFC). We show that board independence is associated with less restrictive covenants suggesting lenders willingness to delegate some monitoring of firms with independent boards. More nuanced analysis between the pre-GFC, GFC and post-GFC periods shows mixed results and we suggest that, during the GFC and its aftermath, lenders place more emphasis on ex ante screening relative to ex post monitoring. We contribute to the literature by providing evidence on covenant use and lenders choices in periods of credit rationing. © 2018 AFAANZ |
| first_indexed | 2025-11-14T17:52:19Z |
| format | Article |
| id | iium-81638 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English English |
| last_indexed | 2025-11-14T17:52:19Z |
| publishDate | 2020 |
| publisher | Blackwell Publishing |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-816382020-11-13T08:04:37Z http://irep.iium.edu.my/81638/ Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis Abu Bakar, Intan Suryani Khan, Arifur Mather, Paul R. Tanewski, George A. HJ Public Finance HJ8003 Public credit. Debts. Loans. Claims We examine the association between board independence and restrictiveness of covenants in U.S. private debt contracts around the global financial crisis (GFC). We show that board independence is associated with less restrictive covenants suggesting lenders willingness to delegate some monitoring of firms with independent boards. More nuanced analysis between the pre-GFC, GFC and post-GFC periods shows mixed results and we suggest that, during the GFC and its aftermath, lenders place more emphasis on ex ante screening relative to ex post monitoring. We contribute to the literature by providing evidence on covenant use and lenders choices in periods of credit rationing. © 2018 AFAANZ Blackwell Publishing 2020-04 Article PeerReviewed application/pdf en http://irep.iium.edu.my/81638/19/81638_Board%20monitoring%20and%20covenant%20restrictiveness%20in%20private_new.pdf application/pdf en http://irep.iium.edu.my/81638/2/81638_Board%20monitoring%20and%20covenant%20restrictiveness_SCOPUS.pdf application/pdf en http://irep.iium.edu.my/81638/3/81638_Board%20monitoring%20and%20covenant%20restrictiveness_WOS.pdf Abu Bakar, Intan Suryani and Khan, Arifur and Mather, Paul R. and Tanewski, George A. (2020) Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis. Accounting and Finance, 60 (SI). pp. 661-692. ISSN 0810-5391 E-ISSN 1467-629X https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12357 10.1111/acfi.12357 |
| spellingShingle | HJ Public Finance HJ8003 Public credit. Debts. Loans. Claims Abu Bakar, Intan Suryani Khan, Arifur Mather, Paul R. Tanewski, George A. Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| title | Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| title_full | Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| title_fullStr | Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| title_full_unstemmed | Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| title_short | Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| title_sort | board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis |
| topic | HJ Public Finance HJ8003 Public credit. Debts. Loans. Claims |
| url | http://irep.iium.edu.my/81638/ http://irep.iium.edu.my/81638/ http://irep.iium.edu.my/81638/ http://irep.iium.edu.my/81638/19/81638_Board%20monitoring%20and%20covenant%20restrictiveness%20in%20private_new.pdf http://irep.iium.edu.my/81638/2/81638_Board%20monitoring%20and%20covenant%20restrictiveness_SCOPUS.pdf http://irep.iium.edu.my/81638/3/81638_Board%20monitoring%20and%20covenant%20restrictiveness_WOS.pdf |