We examine dispersion in director characteristics within a board. Directors with different skills can augment the board's overall expertise and decision making flexibility, but they also face coordination problems. Empirically, the negative effect of dispersion on value prevails. To establish...

While the fraction of independent directors has been widely used as a proxy for monitoring effectiveness of the board, there are no clear-cut measures that capture the advising effectiveness of the board. We develop and validate two new measures of board advising: (i) per-outside-director...

We argue that not all independent directors are equally effective in monitoring top management. Specifically, directors who are appointed by the CEO are likely to have stronger allegiance to the CEO and will be weaker monitors. To examine this hypothesis, we propose and empirically deploy two...

We address two aspects of board dynamics — group-think and teamwork — that both arise from increased director overlap. Overlap captures the extent of common service by board directors. Greater overlap can lead to excessive cohesiveness of the group and thus group-think, where the desire for...

In this paper, we survey the literature on corporate boards, with a specific focus on its primary functions of monitoring and advising the CEO. In particular, we consider how board structure and the individual directors’ characteristics, skill sets, connections, busyness, and incentives affect...