STRENGTHENING BOARDS THROUGH DIVERSITY – A TWO-SIDED MARKET THAT CAN BE EFFECTIVELY SERVICED BY INTERMEDIARIES

Akshaya Kamalnath, Lecturer, Auckland University of Technology

The current focus on the monitoring role of the board has come under much criticism. Independent directors play a significant role in this model. However, their ability to truly function independently has been rightly questioned in the last decade. Independent directors are impeded by two main problems: lack of access to relevant information, for which they are reliant on management; and the high likelihood of being captured (to varying degrees) by management. There have been various suggestions to fix these problems, ranging from enhancing board diversity to drastically reforming the current model of corporate boards.

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