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This paper is a survey of the literature on boards of directors, with an emphasis on

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We posit that limited transparency of firms ’ operations to outside investors increases demands on governance systems to alleviate moral hazard problems. We investigate how ownership concentration, directors ’ and executive’s incentives, and board structure vary with: 1) earnings timeliness, and 2) organizational complexity measured as geographic and/or product line diversification. We find that ownership concentration, directors ’ and executives ’ equity-based incentives, and outside directors’ reputations vary inversely with earnings timeliness, and that ownership concentration, and directors’ equity-based incentives increase with firm complexity. However, board size and the percentage of inside directors do not vary significantly with earnings timeliness or firm complexity.

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We analyze whether board structure and director independence in closed-end investment companies are related to shareholder interests in ways that are consistent with boards being effective monitors. We report that funds with relatively low expense ratios, one measure of board effectiveness, have smaller boards, a higher proportion of board members who are legally considered independent, relatively low director compensation, and charter provisions that specify remedial action if discounts become large. Evidence from our analysis of major fund restructuring decisions, including share repurchases, open-ending proposals and right offerings, is largely consistent with the expense ratio analysis. Overall, board characteristics that we identify with effective board independence are associated with lower expense ratios and value-enhancing restructurings.

This paper examines the role of boards of directors in light of institutional contingencies and recent best practice governance guidelines and regulation such as the United Kingdom Higgs Review and the United States Sarbanes-Oxley Act 2002. Particular attention is paid to discussing the role of independent directors across countries, and the implications for corporate governance innovation. It concludes by posing questions about recent corporate governance transformations and providing suggestions for future research. ‘Having served on the board of public companies since 1993, [she] has watched the culture of board-rooms change from golf games, cigars and fancy dinners to meetings that begin at 6 a.m. and intense pressure to submerge oneself in ever-changing ac-counting and governance regulations. ’ (Wall Street Journal, 21 June 2004, p. R4).

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Our research provides the first empirical analysis of uncontested director elections. Using a large sample of data recently available, we find that shareholder votes are significantly related to firm performance, director performance, voting mechanisms, and the level of shareholder rights associated with a firm. Directors attending less than 75 % of board meetings and those receiving negative ISS recommendations receive 14 % and 19 % fewer votes, respectively. Meanwhile, other variables have little economic impact on shareholder votes, and even directors and firms that are poorly performing typically receive more than 90 % of the vote. However, fewer director votes lead to reductions in ‘abnormal ’ compensation levels and higher levels of CEO turnover. We also find that director votes affect a firm’s likelihood of removing poison pills and classified boards. At the same time, director votes have little impact on the election outcome, firm performance, or director reputation. These results provide important benchmarks for the current debate about reform of the election process.