The Transformation of Us Corporate Boards: 1997-2003

Abstract

We study changes in board characteristics in U.S. public firms between 1997 and 2003. During that period boards become smaller and more independent, there are fewer cases of interlocking directorships and a decrease in multiple directorships. We also find changes in director background: an increase in the number of directors with financial background and a decrease in the number of directors with industrial background. Some of the changes occur already between 1997 and 2000. However, we find larger changes between 2000 and 2003, in conjunction with the corporate scandals and the new governance rules. We find little change in the financial stake of independent directors and in separating CEOs from the chairman position.

JEL Classification: G34, G38