Board Structure : An Empirical Study of Firms in Anglo-American Governance Environments

Paper Type - Research Paper.Purpose - With boards of directors playing both monitoring and guidance roles, we examine the impact of board structure on firm value in large US and UK firms using the lenses of agency and resource dependence theories. Design/Methodology/Approach - Using a sample of firms in the US and the UK from 2000-2007, we conduct a panel data analysis of the impact of board structure on firm value and examine the nuances of different governance environments. Findings - We find distinct differences in the impact of board independence, board size, and outside director busyness on firm value between UK and US firms. Specifically, we find that board independence, board size, and board busyness all have a significant positive impact on firm value in the UK. However, we find no significant relationship between board independence and firm value among US firms. Both board size and board busyness are found to be positively associated with firm value in the US.Social Implications - We find strong support for resource dependence theory in the UK but limited support for agency theory in the US. Originality/value - This paper takes a multi-country approach to examining the impact of board structure on firm value