Independent Directors

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 amp; Bernard Black, Is There a Relationship Between Board Composition and Firm Performance?, 54 Business Lawyer 921-963 (1999), available at lt;a href=http://ssrn.com/abstract=11417gt;http://ssrn.com/abstract=11417lt;/agt;.For the published version of Bhagat and Black (working paper 1997), cited in this review, see Sanjai Bhagat amp; Bernard Black, The Non-Correlation Between Board Independence and Long-Term Firm Performance, 27 Journal of Corporation Law 231-274 (2002), available at lt;a href=http://ssrn.com/abstract=133808gt;http://ssrn.com/abstract=133808.lt;/agt