This thesis explores whether independent directors in the USA and Canada are effective in holding management accountable by: (1) analyzing how the policy of relying on independent directors developed and operates; (2) introducing the main theoretical critiques of independent directors’ monitoring effect; and (3) examining whether empirical studies in the field of management science and financial economics support the policy in both countries of relying on independent directors as corporate monitors. Empirical evidence shows that boards with a majority of independent directors, in some circumstances, were associated with better firm performance (in the post-SOX period) and fulfilled certain board tasks effectively in the United States. Canadian studies, however, have not shown a positive association with improved firm performance. Audit committees composed entirely of independent directors have been effective in ensuring the quality of financial reporting in the United States, but this effect has not been found in Canada. Compensation committees composed fully of independent directors neither constrained the level of executive compensation nor tied CEO pay to firm performance in either country. US firms with an audit committee member who had accounting expertise, rather than financial analysis or supervisory expertise, were associated with a higher quality of financial reporting, while Canadian firms with an audit committee member who has financial expertise, instead of financial literacy, were associated with a similar effect. Studies also showed that independent directors perform better in certain circumstances. Based on empirical evidence, US regulators should consider: (1) changing the current mandatory requirements for an independent board and a completely independent compensation committee to a comply-or-explain requirement; (2) narrowing the qualification of a financial expert to an individual who has accounting expertise; and (3) recruiting independent directors who have two or fewer outside directorships, hold more of the corporation’s shares, have lower cost of acquiring corporate information, and have no social connections with the CEO. In Canada, weak evidence of the monitoring effectiveness of independent directors supports the existing comply-or-explain approach. Canadian regulators may only need to require or recommend that at least one audit committee member has financial expertise, instead of only financial literacy.

In this thesis I investigate the impact of outside directors experience on company value. I do so by looking at a clear event, company delistings in the time period 2003 to 2011 in South Africa, a country with arguably imperfect institutions. Based on qualitative and quantitative research I am able to establish that director experience is indeed associated with company value. The qualitative analysis is based on semi-structured interviews with over 30 highly experienced, independent non-executive directors who have/had seats on over 150 South African listed company boards. Their responses confirm resource theory dependency and provide information on the nature of experience, its relevance during delisting and under other circumstances, as well as insight into the type of experience lacking on boards in corporate South Africa. The results of this research can be of practical use to nomination committees and has implications for future South African governance code reforms and/or guidelines.

This thesis explores whether independent directors in the USA and Canada are effective in holding management accountable by: (1) analyzing how the policy of relying on independent directors developed and operates; (2) introducing the main theoretical critiques of independent directors’ monitoring effect; and (3) examining whether empirical studies in the field of management science and financial economics support the policy in both countries of relying on independent directors as corporate monitors. Empirical evidence shows that boards with a majority of independent directors, in some circumstances, were associated with better firm performance (in the post-SOX period) and fulfilled certain board tasks effectively in the United States. Canadian studies, however, have not shown a positive association with improved firm performance. Audit committees composed entirely of independent directors have been effective in ensuring the quality of financial reporting in the United States, but this effect has not been found in Canada. Compensation committees composed fully of independent directors neither constrained the level of executive compensation nor tied CEO pay to firm performance in either country. US firms with an audit committee member who had accounting expertise, rather than financial analysis or supervisory expertise, were associated with a higher quality of financial reporting, while Canadian firms with an audit committee member who has financial expertise, instead of financial literacy, were associated with a similar effect. Studies also showed that independent directors perform better in certain circumstances. Based on empirical evidence, US regulators should consider: (1) changing the current mandatory requirements for an independent board and a completely independent compensation committee to a comply-or-explain requirement; (2) narrowing the qualification of a financial expert to an individual who has accounting expertise; and (3) recruiting independent directors who have two or fewer outside directorships, hold more of the corporation’s shares, have lower cost of acquiring corporate information, and have no social connections with the CEO. In Canada, weak evidence of the monitoring effectiveness of independent directors supports the existing comply-or-explain approach. Canadian regulators may only need to require or recommend that at least one audit committee member has financial expertise, instead of only financial literacy.

Familjeföretag står inför nya utmaningar i en föränderlig värld, vilket ökar kompetensbehovet inom  styrelsen. Tidigare forskning visar att tillsättandet av externa ledamöter kan tillgodose detta behov, men det råder oklarhet kring vilka specifika kompetenser som prioriteras. Studien syftar till att undersöka hur familjeföretag värderar och rekryterar externa styrelseledamöter, med fokus på professionella och personliga egenskaper. Studien utgår främst från resursberoendeteorin och baseras på sex kvalitativa intervjuer med ägare i familjeföretag samt experter inom området. Resultatet indikerar att familjeföretagen värdesätter integritet, engagemang och mjuka värden, vilket bidrar till att nya perspektiv tas upp i styrelserummet. Därtill diskuteras vikten av tydliga kravspecifikationer samt valet av rekryteringsmetod. Studien fastslår att åldersmångfald, generell kompetens och erfarenhet i kombination med integritet och engagemang prioriteras, vilket betonar vikten av ett tydligt samspel mellan de professionella och personliga egenskaperna. / Family businesses face new challenges in a dynamic environment, which increases the need for skills on the board. Previous research shows that the appointment of outside directors can meet this need, but it is unclear which specific competencies are prioritized. This study aims to investigate how family firms value and recruit outside directors, focusing on professional and personal characteristics. The study is mainly based on the Resource Dependency Theory and has involved six qualitative interviews with family business owners and experts in the field. The results indicate that family businesses value integrity, commitment and soft values, which contribute to new perspectives being brought into the boardroom. The importance of clear specifications and the choice of recruitment method are also discussed. The study states that age diversity, general competence and experience combined with integrity and commitment are prioritized, which emphasizes the importance of a clear interplay between the professional and personal characteristics.