Ownership structure and board composition in a high ownership concentration context

• It is important to distinguish between the nominee directors and independent directors.
• Results confirm a nonlinear relationship between blockholders and independents.
• Insider ownership is only significant if one looks at the percentage of outsiders.
• Results confirm a U-shaped relationship between insider ownership and outsiders.
• Independents are necessary to safeguard the interests of small shareholders.

Few articles have addressed the relation between the ownership structure and the composition of the boards. The results of the analysis performed on a sample of Spanish listed companies for the period 2004–2011, show that in markets where corporate ownership is highly concentrated, it is necessary to devote special attention to blockholders and to differentiate the figure of the independent directors from the group of outsiders. The results confirm a negative and decreasing relation between blockholders and the percentage of independents while insiders’ ownership is only significant if one looks at the percentage of outsiders as a whole, in which case it shows a U-shaped quadratic relation.