A critical analysis on the role and the impact of independent director in Belgian listed companies

Details

Supervisors

Sarens, Gerrit

Faculty

Louvain School of Management

Degree label

Master [120] en ingénieur de gestion

Abstract

This thesis represents a critical analysis on the role and the impact of independent directors in the board of Belgian listed companies. It aims to understand the specific balance of power in the board between, on one side, executive directors and financial directors with a financial motivation in the company, and on the other side, independent directors, who are chosen for their expertise. It also aims to capture the different factors contributing to a good dynamic at the board level. These objectives were achieved through a combination of both research and qualitative analysis. For the latter, 10 interviews with independent directors in Belgian listed companies were conducted. The analysis first showed that the difference in role and behavior between the different types of directors found in the literature, was almost non-existent in Belgian listed companies. Secondly, the interviewees highlighted the importance of the chair of the board in making sure all board members could share their opinion, in animating the debates and in setting the tone at the top. Regarding the factors contributing to a good dynamic and a well-functioning board, the following were identified: the personal added value of independent directors, both based on their expertise and attitude, the composition of the board and its diversity of competences, the board culture characterized by trust, openness and transparency and finally the integration of independent directors through information access.