Board monitoring and covenant restrictiveness in private debt contracts during the global financial crisis

• Main Authors: Abu Bakar, Intan Suryani, Khan, Arifur, Mather, Paul R., Tanewski, George A.
• Format: Article
• Language: English; English; English
• Published: Blackwell Publishing 2020
• Subjects: HJ Public Finance; HJ8003 Public credit. Debts. Loans. Claims
• Online Access: 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; http://irep.iium.edu.my/81638/; https://onlinelibrary.wiley.com/doi/abs/10.1111/acfi.12357
• Institution: Universiti Islam Antarabangsa Malaysia

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...