So claims the opening sentence of a CLS blog post by a trio of University of Florida economists, albeit with subsequent qualifications:
A well-functioning independent board of directors is a pillar of effective corporate governance. ...
A large body of academic literature has also highlighted the importance of board independence and has explored its effects on various measures of firm performance. Despite the strong push for greater director independence, the observed links between board independence and firm performance are often quite weak. Moreover, corporate fraud and misconduct still remain a significant problem in Corporate America (KPMG Forensic Integrity Survey, 2005-2006, 2009, and 2013) even after a decade of significant regulatory efforts that were designed to promote a board’s oversight function through director independence.
I just don't buy the empirical claim. In my book, Corporate Governance after the Financial Crisis, I review the evidence and arguments at length before concluding that:
The post-SOX regulatory environment rests on the conventional wisdom that board independence is an unalloyed good. As the preceding sections demonstrated, however, the empirical evidence on the merits of board independence is mixed. Accordingly, even though there is some reason to think independent board members are finally becoming properly incentivized and, as a result, more effective, the clearest take-home lesson from the preceding analysis is still that one size does not fit all. ...
The post-SOX standards, however, strap all listed companies into a single model of corporate governance. By establishing a highly restrictive definition of director independence and mandating that such directors dominate both the board and its required committees, the new rules fail to take into account the diversity and variance among firms. The new rules thus satisfy our definition of quack corporate governance. The one size fits all model they mandate should be scrapped in favor of allowing each firm to develop the particular mix of monitoring and management that best suits its individual needs. Unfortunately, as we will see throughout our review of the post-crisis federal regulatory scheme, neither Congress nor the SEC has given any deference to the principle of private ordering.