ABSTRACT
In the aftermath of the corporate excesses of the 1980's, the performance of boards of directors has come under increased scrutiny. A number of professional and regulatory committees have addressed the issue of board performance and some have recommended that companies should appoint a board of directors having a majority of non-executive directors, with an appropriate mix of experience. In contrast, empirical evidence casts doubt on whether non-executive directors improve financial performance and suggests that the value of non-executive directors differs across companies. This study examines the composition of boards of directors and the personal characteristics of their non-executive directors, for a sample of eighty-six Australian listed public companies, and investigates whether these factors are associated with financial performance. Boards were found, on average, to have a majority (greater than 50%) of non-executive directors with a majority of those non-executive directors holding degrees. Non-executive directors were found to have varying amounts of firm, industry and other professional experience. Cross-sectional variation in board composition and non-executive directors' characteristics appears unrelated to differences in financial performance.