The Determinants of the Presence of Independent Directors in French Board Companies



The purpose of this paper is to study the determinants of the presence of independent directors on boards of
directors. Based on the agency theory, we study the different factors influencing the nomination of independent
directors. The tests were applied to a sample of 79 companies belonging to the SBF120 index from 1999 to 2001.
Using an OLS data regression framework, the findings show that the ownership structure and the size of the
company determine the independence of the board from the management. The results indicate that when the part
of capital represented on the board and held by the coalition of control is low, the presence of independent
directors is more important. Also, the presence of the independent directors is significantly and positively
determined by the participation of institutional investors and the size of the firm. However we do not find
evidence of the influence of the leadership structure and the leverage on the independence of the board.

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