Do outside directors monitor managers?

New Zealand Corporate Boards in Transition: Composition, Activity and Incentives between 1995 and 2010

“…Consistent with these contrasting views, some authors (e.g., Byrd and Hickman, 1992;Dann et al, 2003;Ryan and Wiggins, 2004) find that greater board independence has a positive effect on various aspects of firm performance, while others (e.g., Agrawal and Knoeber, 1996;Barnhart and Rosentein, 1998;Bhagat and Black, 2002) find the reverse, at least for some firm types. In NZ, NZX Listing Rule 3.3.1 requires that a minimum proportion of board directors be independent.…”

Corporate Board Characteristics, Managerial Entrenchment and Diversification Strategy: Evidence from Tunisian Context

“…According to Fama (1980), an outside directors are considered to be a professional arbitrator whose main task is to stimulate and control competition among the senior executives of the company. Thus, they are more effective than inside directors in the control and discipline of the manager (Rosenstein & Wyatt, 1990;Byrd & Hickman, 1992). Indeed, Godard and Schatt (2004) put forward the idea that outside directors have an important role in the effectiveness of the diversification strategy in line with shareholders' wealth.…”

Corporate Goverance Determinants of Earnings Management: Evidence from Nigerian Quoted Companies

“…Also there have been considerable studies supporting that outside directors protect shareholders in specific instances when there is an agency problem (Brickley & James, 1987;Weisbach, 1988;Byrd & Hickman, 1992;and Lee, Rosenstein, Rangan, & Davidson, 1992). According to Bhagat & Black (2000), the relation between the proportion of outside directors and long-term financial performance, however, has not been supported in empirical research.…”