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Board Independence Power

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The Impact Of Sarbanes-Oxley Changes And Board Independence Power On Selected Governance Practices At The Board Level, Karin L. Schnarr Aug 2015

The Impact Of Sarbanes-Oxley Changes And Board Independence Power On Selected Governance Practices At The Board Level, Karin L. Schnarr

Electronic Thesis and Dissertation Repository

The Sarbanes-Oxley Act (SOX) and related stock listing requirements now require boards of publicly traded companies to have a majority of outside, independent directors to provide a counterbalance to the power of management on the board. SOX also mandated the existence of three board committees, audit, nominating, and compensation which had to be comprised solely of independent directors.

Using a sample of 335 firms and 3,675 observations from the S&P 500 from 1999 to 2009, I use panel Poisson regressions in pre-SOX (1999-2003) and post-SOX (2004-2009) periods to test the effect of SOX structural changes at the board and committee …