Board information: meeting the evolving needs of corporate directors

Abstract

PurposeAmid ongoing criticism that corporate boards do not receive adequate information to help them fulfill their current and emerging roles, the purpose of this paper is to focus on the type of information directors receive. Specifically, to examine whether greater board independence and greater board expertise were associated with receiving more information, in five specific categories.Design/methodology/approachHypotheses about the relationships between the composition of corporate boards and the various types of information they receive were tested by means of a survey of 161 Canadian companies listed on the Toronto Stock Exchange.FindingsThe authors findings indicate a strong association between board expertise and each type of information received and suggest a weaker relationship between board independence and information received. Specifically, the results demonstrate that more independent boards do not receive larger amounts of information that is more forward‐looking in nature.Research limitations/implicationsThese findings contribute to the literature on governance by providing relevant empirical evidence, based on primary data on board information issues. However, these results must be interpreted within the context of the use of various perceptual measures.Practical implicationsNow that the composition of corporate boards has changed considerably, the findings of this study underline the need to re‐examine the supporting information processes. Hence, this study should help provide guidance to organizations examining the content of their current information strategy.Originality/valueAn important contribution of this study is its detailed characterization of the information provided to corporate boards, including financial and non‐financial information and reflecting the five traditional stages of the strategic management process.