Role of Independent Directors - Enhancing or Otherwise of the Shareholders Wealth- An Empirical Investigation - by Rajiv Gandhi Indian Institute of Management, Shillong - 2014

(Executive Summary)

The present study is an attempt in establishing whether independent directors' add any value to the firm. The study also aimed at analyzing whether higher amount of network connections amongst the independent directors have any impact on the firm value. Out study establishes that increase in the board size and duality decrease and increases performance respectively which is in contrary to the prediction of the agency theory. The degree centrality of the board, prestige centrality of the board and the proportion of directors from same industry has statistically significant positive effect on firm performance. This established that network resource of the Board of Directors and the embeddedness of the firm to its core industry through Board of Directors have significant positive effect on firm performance and thus establishing the fact that higher the average number of network connection of the directors in a board higher is the firm performance.

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