Director independence has become a key element of modern corporate governance in the United States. Regulators, scholars, companies and shareholders have all placed a strong emphasis on director independence as a means to ensure that investors’ interests in their companies are well-served. Surprisingly, however, their treatment of director independence has generally failed to consider the impact of director tenure on the independence of boards. Indeed, although legislation, listing rules and state law mandate director independence, none of these rules take into account director tenure.
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