The Changing Nature of Corporate Board Activity

The Changing Nature of Corporate Board Activity

Renee Adams, Jeffrey Gordon

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.

Associated event

In This Video