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The Changing Structure of US Corporate Boards: 1997–2003

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  • Vidhi Chhaochharia
  • Yaniv Grinstein

Abstract

We document changes in board characteristics in public US firms between 1997 and 2003. We find significant changes in board independence, committee independence, board size, interlocking directorships, director occupation and multiple directorships. Most of the changes occur between 2000 and 2003. In general, these changes appear both in small and large firms. However, changes in board size and in multiple directorships are statistically significant in large firms only. We find weaker trends in the financial stake of independent directors and in separating CEOs from the chairman position. In 2003 many independent directors have small holdings in the firms they direct and CEOs chair around two‐thirds of the boards in our sample. Together, these results shed light on the types of board structures that have recently become the norm in US public firms.

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  • Vidhi Chhaochharia & Yaniv Grinstein, 2007. "The Changing Structure of US Corporate Boards: 1997–2003," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1215-1223, November.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:6:p:1215-1223
    DOI: 10.1111/j.1467-8683.2007.00642.x
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    2. Ji, Xu (Jane) & Boyle, Glenn, 2011. "New Zealand Corporate Boards in Transition: Composition, Activity and Incentives Between 1995 and 2010," Working Paper Series 19213, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    3. Faleye, Olubunmi & Krishnan, Karthik, 2017. "Risky lending: Does bank corporate governance matter?," Journal of Banking & Finance, Elsevier, vol. 83(C), pages 57-69.
    4. Cai, Guilong & Xie, Sujuan & Xu, Yue & Zeng, Yamin & Zhang, Junsheng, 2019. "Ultimate parent's board reform and controlling shareholder entrenchment: Evidence from a quasi-natural experiment in China," Emerging Markets Review, Elsevier, vol. 38(C), pages 389-403.
    5. Yenn‐Ru Chen, 2008. "Corporate Governance and Cash Holdings: Listed New Economy versus Old Economy Firms," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(5), pages 430-442, September.
    6. Fedaseyeu, Viktar & Linck, James S. & Wagner, Hannes F., 2018. "Do qualifications matter? New evidence on board functions and director compensation," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 816-839.
    7. Joo, Mohammad Hashemi & Lawrence, Edward & Parhizgari, Ali, 2021. "Securities litigation risk and board gender diversity," Journal of Corporate Finance, Elsevier, vol. 71(C).
    8. Afzalur Rashid, 2015. "Revisiting Agency Theory: Evidence of Board Independence and Agency Cost from Bangladesh," Journal of Business Ethics, Springer, vol. 130(1), pages 181-198, August.
    9. Siepel, Josh & Nightingale, Paul, 2014. "Anglo-Saxon governance: Similarities, difference and outcomes in a financialised world," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 27-35.
    10. Pao-Chen Lee, 2019. "Chinese Supervisory Board-An Experiential Case," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 4(3), pages 19-33, March.

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