Board structure, controlling ownership, and business groups: Evidence from India

We examine the impact of controlling founder ownership (CS) and business groups (BGs) on firm board structure for Indian firms, where most of the firms are inter-connected. We argue that due to inadequate legal protection, CS and BGs should influence the board structure of Indian firms. Our empirical evidence finds a U-shaped relationship between board independence and CS. We show that firms affiliated with business groups have lower board independence compared to standalone firms. We also find that investors value CG reforms related to board independence.