Board independence and corporate governance: Mediating role of financial asset allocation

• Board independence positively impacts corporate governance level. • Industry competition will affect the governance effect of board independence. • The independence of the board of directors will promote the allocation of financial assets. This study examined the impact of board independence on corporate governance and the mediating role of financial asset allocation. Data analysis of nonfinancial A-share companies in Shanghai and Shenzhen from 2015 to 2022 indicates that board independence positively correlated with corporate governance level; this was partially mediated by financial asset allocation. The findings can optimize board structure and improve corporate capital structure and governance levels.