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Non-executive directors: independence or competence?
Filed in archive boards of directors by leon on December 24, 2005
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Much has been said about the importance of having independent directors. Trouble is all the studies are inconclusive. Now a new study suggests suggests independent directors are not as effective. Not sure if the methodology stacks up but it adds to the debate, even if it doesn't provide the answers.

Trouble is director independence, board size, splitting the role chief executive officer and chairman, age of directors and tenure has less impact on corporate governance than what many think. As this piece suggests, independence is a state of mind. A director can be formally independent and not psychologically independent within the boardroom. Canadian academic Richard Leblanc says competence is more important than independence. You can listen to him make his case here.

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Tags: company  directors  boards  independent  Richard 
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