Independent Directors and Corporate Governance

Sally Wheeler

Research output: Contribution to journalArticle

Abstract

The paper examines the reliance placed in the United Kingdom and Australia on the concept of ‘independent directors’ as a mechanism to ensure better (less crisis prone) corporate governance. The article suggests that there is an over emphasis placed on some rather limited psychological evidence that independence in the boardroom produces more critical thinking and informed discussion thus leading to higher quality decision-making. The article offers others evidence, drawn from the material on the psychology of group formation and group discussion, which suggests that this confidence in ‘independence’ is misplaced. The article exposes a misunderstanding between independence as a character trait and independence as a structural concern which goes to the heart of the corporate governance discourse around the benefits of independence.
Original languageEnglish
Pages (from-to)168-187
Number of pages20
JournalAustralian Journal of Corporate Law
Volume27
Issue number1
Publication statusPublished - 2012

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