HMC Business Consulting, LLC

Herbert M. Chain, MBA, CPA

Independent Director, Audit Committee Chair, SOX Financial Expert, Accounting and Auditing Professional, Professor,  Consultant

Sound advice based on experience



Sending boards back to school? The effects of professors in the boardroom.

Posted on November 14, 2015 at 5:40 PM

Richard Leblanc of Boards & Advisors found and posted an academic article on LinkedIn, “Professors in the Boardroom and Their Impact on Corporate Governance and Firm Performance,” by Bill Francis, Iftekhar Hasan and Qiang Wu ( The authors’ research question was essentially whether having professors on a corporate board would enhance the performance of the board and hence the company. Specifically, they concluded that “the presence of academic directors is associated with higher acquisition performance, higher number of patents and citations, higher stock price informativeness, lower discretionary accruals, lower CEO compensation, and higher CEO forced turnover-performance sensitivity.”


In reading the article, it struck me that there are actually broader considerations at play here. This research is, above all else, a study resulting from the call for greater board diversity. The premise is that the skillsets and thought processes of professors positively add to board dynamics and discussions. Inherent in that consideration is that they bring a new dimension to the process – one free of past biases and groupthink tendencies. This same argument can be made as regards other groups (ethnic, gender, cultural, geographic, etc.).


Intuitively, I think most of us agree that having differing viewpoints and perspectives makes for more dynamic, broader and fruitful discussions and better conclusions. I often thought during my days at Deloitte that when we brought into a room a group of professionals with different perspectives honed by experience, training, culture and background, we would generally come to the right, correct decision – regardless of the issue at hand. This is quite similar, albeit focusing on the contributions of a different group.


As the board diversity discussion (and imperative) proceeds and matures, intuitive, legal and ethical considerations will be supplemented (and driven) by academic research. While correlation and causality in research will always be an issue, and must be carefully analyzed in reaching supportable conclusions, adding research to intuition cannot be a bad thing.


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