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.
Adolf A. Berle Professor of Law
Professor of Finance / London Business School
C.V.Starr Professor of Economics