Lawyers on board

Board-level lawyers can boost corporate performance, according to the results of a recent study by law and finance professors of Cornell Law School, reports the Financial Times.

The study shows that the number of US companies with a lawyer director rose from 24 per cent in 2000 to 43 per cent in 2009. Companies with lawyers on the board tend to pay their chief executives more, but their overall pay remains more constant due to lower levels of corporate risk-taking and default. Bringing lawyers onto the board also helps to reduce the risk of litigation and improve internal governance, notes Tett citing the study. However, the bigger problem, she warns, is that directorships have become a legal and reputational minefield, making it harder to get anybody who is competent, independent and expert to join a public board, let alone lawyers.

(04|2013) Source: Financial Times