Speaker:
Renee Adams
Professor of Finance/FIRN director, Commonwealth Bank Chair in Finance University of New South Wales
Discussant:
Jeffrey Gordon
Richard Paul Richman Professor of Law and Co-Director Columbia Law School
Abstract:
Boards are working harder over time, but they may not be working better. Using a comprehensive sample of board data from 1996 to 2010, we document that a large proportion of board activity is carried out by committees. Pre-SOX, 36% of board activity takes place in committees. This increases to 47% post-SOX. Since board activity levels have risen substantially over time, this means more board activity is carried out in the absence of insiders. This change does not appear to be value-enhancing. Board committees are relatively understudied, but our results suggest that ignoring them leads to a very incomplete picture of board governance.
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