A lot of papers argue that board independence is required to get good performance. But we know that firm complexity has an impact on board structure. Moreover the characteristics of the CEO, may influence the level of independence required, as does the level of ownership's dispersion.
The question is very interesting. The empirical evidence on the relationship between board independence and performance has found results mixed. In my opinion, to try to get an optimal board- "truly independent" - members should be appointed only on the basis of the curriculum (drawn from a public directory) and monitored with regard any relationship with other board members, ownership, and management. In addition, their compensation should be linked to performance positively and negatively to fraud (or other criminal acts).
Dear Fabrizio, thanks you for your suggestion. Skills and capacities of board members must be obvious (experience in finance, in international affairs,...), and no previous connection between board members should exist. But how to promote quickly good communcation and team-work between them?
Dear Patrick, I think that is not so obvious. In many boards, for some countries, members of the board do not have specific skills and capacities (experience in finance, in international affairs,...). To promote good teamwork (I believe you're referring to the reduction of asymmetric information) is necessary for the members of the board to have previous experience in other board (multiple directorships do not think it is negative) and have good coordination skills. In addition, it is important, in my opinion, the presence of institutional investors and multicultural diversity on board.
Dear Fabrizio, Thanks you for the idea. I am wondering if in our regressions, it wouldn't be interesting to add an explanatory variable such as the previous experience of an independent director to be sure he will interact quickly and efficiently with the others directors!
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