Do active boards of directors add value to their firms?

Deskripsi

This study examines whether active boards of directors enhance firm value, analyzing data from over 5,000 board observations (1999–2005). Contrary to critiques that frequent meetings prioritize routine tasks over strategic oversight, findings reveal that increased board activity—measured by meeting frequency and committee independence—positively correlates with firm value (using Tobin’s Q). The Sarbanes-Oxley Act (2002) further amplified this effect by mandating stricter governance practices, though independent committees alone showed no incremental performance gains.