Understanding the Board of Directors after the Financial Crisis
Lex Research Topics in Corporate Law & Economics Working Paper No. 2013-5
32 Pages Posted: 7 Oct 2013 Last revised: 9 Oct 2015
Date Written: October 6, 2013
There are numerous studies on the effectiveness of boards that primarily focus on legal formalities, including gender diversity, board size, remuneration, board evaluation and the role of the chairman of the board. While attempting to design a one-size-fits-all framework, scholars approaching board independence from an agency cost perspective have been less concerned with analyzing board structures that contribute to strategic decision-making and corporate performance. We examine the factors and board strategies that are associated with value creation and innovation by analyzing the composition of high-performance and high-growth companies. The paper shows that venture capitalists, with their specific expertise and experience, continue to play an important role as independent board members in the post-IPO period. We specifically investigate the importance of diversity, showing that there are significant differences between the companies in terms of age, gender diversity and business expertise (which is dependent on the stage in the company life-cycle).
Keywords: Board of Directors, Board Insulation, Corporate Governance, Corporate Law, Gender Diversity, Innovation, Stock Market Performance, Value Creation, Venture Capital
JEL Classification: G34, K20, K22, L22, L25, L26, O16
Suggested Citation: Suggested Citation