Three examples of boards’ informational faultlines and expected return on assets
| Example | Type of directorship | Tenure (in years) | Educational specialization | Educational level | Expected return on assets |
|---|---|---|---|---|---|
| Group 1: Weak IFLSa (IFLS = 0.00) | Executive | 1–5 | Business | Master’s | 9% |
| Executive | 1–5 | Business | Master’s | ||
| Executive | 1–5 | Business | Master’s | ||
| Executive | 1–5 | Business | Master’s | ||
| Group 2: Moderate IFLS (IFLS = 0.15) | Independent | < 1 | Law | Master’s | 3% |
| Independent | > 10 | Law | PhD | ||
| Executive | < 1 | Science | Master’s | ||
| Affiliated | < 1 | Economics | Master’s | ||
| Group 3: Strong IFLS (IFLS = 0.45) | Independent | < 1 | Law | Bachelor’s | 13% |
| Independent | < 1 | Law | Master’s | ||
| Executive | 1–5 | Business | Bachelor’s | ||
| Executive | 1–5 | Business | Master’s |
| Example | Type of directorship | Tenure (in years) | Educational specialization | Educational level | Expected return on assets |
|---|---|---|---|---|---|
| Group 1: Weak IFLSa (IFLS = 0.00) | Executive | 1–5 | Business | Master’s | 9% |
| Executive | 1–5 | Business | Master’s | ||
| Executive | 1–5 | Business | Master’s | ||
| Executive | 1–5 | Business | Master’s | ||
| Group 2: Moderate IFLS (IFLS = 0.15) | Independent | < 1 | Law | Master’s | 3% |
| Independent | > 10 | Law | PhD | ||
| Executive | < 1 | Science | Master’s | ||
| Affiliated | < 1 | Economics | Master’s | ||
| Group 3: Strong IFLS (IFLS = 0.45) | Independent | < 1 | Law | Bachelor’s | 13% |
| Independent | < 1 | Law | Master’s | ||
| Executive | 1–5 | Business | Bachelor’s | ||
| Executive | 1–5 | Business | Master’s |
Note: a IFLS = Informational faultlines
Sharing content requires targeting cookies to be enabled. Please update your cookie preferences to use this feature.