Do Independent Boards Harm Employee Safety and Health?

Independent boards are widely regarded as essential for protecting shareholder interests. Their impact on non-shareholder stakeholders is however little known. Using a regulatory reform in the U.S. for identification, we find that the mandatory adoption of independent boards significantly improves workplace safety. The effect is more pronounced for establishments of firms with weaker board and institutional investor monitoring before the shock, and in less competitive and low unionization industries. Treatment firms increase safety spending, add safety metrics to CEO compensation contracts, and reduce safety-reducing earnings manipulations after the shock. Our finding suggests that stronger shareholder governance can benefit non-shareholder stakeholders