| The evidence presented in this study suggests that independent boards do not, on average, increase the value of a firm. Despite this finding for independent boards in aggregate, the evidence also suggests that independent directors do indeed add value to a firm if they possess relevant managerial experience, defined as holding the position of CEO in their primary company. The results also suggest that sitting in multiple boards or having the primary work in a multisegment company are not substitutes for having the CEO title when it comes to adding value to a firm as a director. The findings presented in this paper suggest that a one-size-fits-all independence rule without an experience requirement may be detrimental to the shareholders it is supposed to protect. |
