Shareholder involvement, type and board independence
This paper examines the influence of ownership on the independence of the board of directors,
the main governance mechanism for shareholders. In particular, we look at the impact of
ownership concentration, shareholder type and shareholder involvement on the number of
independent board members. Our results show that ownership concentration has a non-linear
relation with board of director’s independence. However, we find that this relation depends on
the type of shareholders and their involvement in the formal governance bodies of the firm.
The paper contributes to the growing literature on board of directors’ composition and the
influence of different types of ownership on the governance of firms.