If some of the board members are also majority shareholders, would this be considered independent? On one hand, the goal of the board is to benefit the shareholders, so there should be no conflict when shareholders happen to be on board. The the study note seems to indicate that it is not a good idea to have majority shareholder on board. What is the correct view?
Majority shareholders should not ‘dominate’ the board. There should be representation of minority shareholders as well. Independent members would watch out for interests of the company and ALL shareholders, as opposed to siding with management.