Board Composition, Structure, And Financial Performance: An Update

Abstract

In 1998, a meta-analysis of over 60 empirical research studies concluded that there was no demonstrable evidence that either Board of Directors structure or the duality of CEO/Board Chairman roles significantly impacted corporate performance. This article looks at research done since that time, in light of Enron and other corporate scandals as well as the Sarbanes-Oxley Act of 2002 and the increasing diversity of corporate boards. Four additional studies, including follow-up work done by the authors of the 1998 meta-analysis, are compared and contrasted. In addition, the results of direct research on twenty Fortune 100 companies is presented. Finally, suggestions for future research in terms of both topic and methodology are provided, along with this author’s learnings from the project.