The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 08 May 2026 11:32:19 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Directors: Older and Wiser, or Too Old to Govern? – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Directors: Older and Wiser, or Too Old to Govern? https://corpgov.law.harvard.edu/2019/01/22/directors-older-and-wiser-or-too-old-to-govern/?utm_source=rss&utm_medium=rss&utm_campaign=directors-older-and-wiser-or-too-old-to-govern https://corpgov.law.harvard.edu/2019/01/22/directors-older-and-wiser-or-too-old-to-govern/#comments Tue, 22 Jan 2019 14:20:32 +0000 https://corpgov.law.harvard.edu/?p=114461?d=20190122092032EST Posted by Ronald Masulis (University of New South Wales), Cong Wang (Chinese University of Hong Kong), Fei Xie (University of Delaware), and Shuran Zhang (Jinan University), on Tuesday, January 22, 2019
Editor's Note:

Ronald Masulis is Scientia Professor of Finance at University of New South Wales Australian School of Business; Cong Wang is Professor of Finance at The Chinese University of Hong Kong, Shenzhen and the associate director of Shenzhen Finance Institute; Fei Xie is Associate Professor of Finance at the University of Delaware; and Shuran Zhang is Associate Professor of Finance at Jinan University. This post is based on their recent paper.

The past two decades have witnessed dramatic changes to the boards of directors of U.S. public corporations. Several recent governance reforms (the 2002 Sarbanes-Oxley Act, the revised 2003 NYSE/Nasdaq listing rules, and the 2010 Dodd-Frank Act) combined with a rise in shareholder activism have enhanced director qualifications and independence and made boards more accountable. These regulatory changes have significantly increased the responsibilities and liabilities of outside directors. Many firms have also placed limits on how many boards a director can sit on. This changing environment has reduced the ability and incentives of active senior corporate executives to serve on outside boards. Faced with this reduced supply of qualified independent directors and the increased demand for them, firms are increasingly relying on older director candidates. As a result, in recent years the boards of U.S. public corporations have become notably older in age. For example, over the period of 1998 to 2014, the median age of independent directors at large U.S. firms rose from 60 to 64, and the percentage of firms with a majority of independent directors age 65 or above nearly doubled from 26% to 50%.

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