Independent and institutional directors on board: do they matter in dividend policy?

Abstract

The Agency theory supports the payment of dividends as a strategy to reduce the problems of asymmetric information between the directors of a company and the shareholders. In the next study it will be analysed with greater emphasis this theory, given the weight to independent and institutional directors on board and its impact on the dividends payment decision. For them, there are two scenarios: firstly that the independent can have both positive and negative in the payment of dividends, and secondly, that the independent will positively affect the decision of dividends. The results reveal that the institutional directors have an important role in the payment of dividends, while the independent directors do not influence the policy of dividends from the company.