Article
The Rise of Independent Directors in the United States, 1950-2005
Of Shareholder Value and Stock Market Prices
by Jeffrey N. Gordon
Between 1950 and 2005, the composition of large public company boards dramatically shifted towards independent directors, from approximately 20% independents to 75% independents. The standards for independence also became increasingly rigorous over the period. The available empirical evidence provides no convincing explanation for this change. This Article explains the trend in terms of two interrelated…