In theory, director independence ought to be a very good thing. In practice, director independence has been foisted upon most public US corporations by virtue of Sarbanes-Oxley and stock exchange listing standards. Surprisingly, however, the empirical evidence on director independence is quite equivocal. I reviewed the evidence as it stood through 2002 in my paper A Critique of the NYSE's Director Independence Listing Standards, in which I argued that the evidence in favor of director independence was, at best, inconclusive. There are many studies suggesting that boards dominated by independent directors actually tend to under perform boards with a healthy admixture of insiders. All of which is by way of introduction to an interesting new paper, Board Compensation and Firm Performance: The Role of 'Independent' Board Members:
See full Article.
Posts
