Proceedings of 7th Annual American Business Research Conference
23 - 24 July 2015, Sheraton LaGuardia East Hotel, New York, USA, ISBN: 978-1-922069-79-5
Corporate Governance and Dividend Strategy: Lessons from Australia
Hussein Abedi Shamsabadi, Byung Min and Richard Chung
We investigate the effect of corporate governance on dividend policy in Australia where
companies have maintained significantly high dividend payouts and a variety of dividend outlets
while governance has been strengthened substantially. Using governance index variables we
created, we found a better governance firm increases dividend payouts. Further examinations
imply that this positive effect of governance is attenuated by growth opportunities whereas the
positive effect is intensified by firm profitability, franked dividend and free cash flow. Our
empirical results also illustrate governance elements which are directly related with monitoring
manager’s decision and performance is more influential to dividend payouts than other
elements.
Discipline: Finance
Key words: Corporate Governance, Corporate Governance Index, Index, Dividend Policy, Dividend
Payout, Dividend Reinvestment Plans, Share Buyback, Share Repurchase, Australia
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Hussein Abedi Shamsabadi, Dept of International Business and Asian Studies, Griffith Business School, Griffith
University, 170 Kessels Rd, Nathan, Brisbane, QLD 4111, Australia. hussein.abedishamsabadi@griffithuni.edu.au, +61411529100
Dr. Byung Min, Dept of International Business and Asian Studies, Griffith Business School, Griffith University, 170 Kessels
Rd, Nathan, Brisbane, QLD 4111, Australia, b.min@griffith.edu.au, +61-(07) 373 55248
Assoc. Prof. Richard Chung, Dept of Department of Accounting, Finance and Economics, Griffith Business School, Griffith
University, 170 Kessels Rd, Nathan, Brisbane, QLD 4111, Australia, r.chung@griffith.edu.au, +61-(07) 555 28584