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Abstract In recent years lawsuits against corporate directors have increased dramatically. Moreover, many critics feel that with current shifts toward greater insider representation, the number will rise still more. This study examines the relationship between board composition and shareholder suits. The results indicate that, when compared to a control group, boards sued for failing to maintain their fiduciary responsibilities tended to have a greater proportion of inside directors. There was, however, no significant relationship between composition and suit outcomes.
Kesner et al. (1990) studied this question.