Independent Directors

THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW, Peter Newman, ed., Vol. 2, pp. 283-287, 1998

10 Pages Posted: 6 Aug 2008  

Sanjai Bhagat

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)

Date Written: May 30, 2008

Abstract

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.

Keywords: boards of directors, independent directors

Suggested Citation

Bhagat, Sanjai and Black, Bernard S., Independent Directors (May 30, 2008). THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW, Peter Newman, ed., Vol. 2, pp. 283-287, 1998. Available at SSRN: https://ssrn.com/abstract=1139191

Sanjai Bhagat

University of Colorado at Boulder - Department of Finance ( email )

Campus Box 419
Boulder, CO 80309
United States
303-492-7821 (Phone)

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Northwestern University - Kellogg School of Management

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)

European Corporate Governance Institute (ECGI)

Brussels
Belgium

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