It is time regulators move to a higher level of disclosure that requires listed firms to report a board index score and corporate governance score. Such score will enable current and potential investors to rank companies in terms of board and corporate governance performance. Berk and DeMazro report that the proportion of outside directors, board independence, is foremost when firing CEOs and making disinvestment and acquisitions. However, they point out that the link between company performance and board independence is not clear. However, this could be because it is difficult measuring board independence in a meaningful way to link it to company performance.

Source: Standard Digital April 24, 2018 08:15 UTC