University of Colorado at Boulder - Department of Finance
Bernard S. Black
Northwestern University - Pritzker School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)
May 30, 2008
THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW, Peter Newman, ed., Vol. 2, pp. 283-287, 1998
We review here the evidence, principally from the United States, on the relationship between board independence and firm behavior and performance. Board composition affects board behavior on a number of discrete board tasks. However, there is no strong evidence that higher board independence predicts better firm performance.
For a longer, somewhat updated survey of the evidence on board independence, see Sanjai Bhagat & Bernard Black, Is There a Relationship Between Board Composition and Firm Performance?, 54 Business Lawyer 921-963 (1999), available at http://ssrn.com/abstract=11417.
For the published version of Bhagat and Black (working paper 1997), cited in this review, see Sanjai Bhagat & Bernard Black, The Non-Correlation Between Board Independence and Long-Term Firm Performance, 27 Journal of Corporation Law 231-274 (2002), available at http://ssrn.com/abstract=133808.
Number of Pages in PDF File: 10
Keywords: boards of directors, independent directors
Date posted: August 6, 2008