The Composition of Board Transition to a New Era

The composition of board is an important topic on corporate governance. Companies’ performance is effected by different factors, one of them is composition of board. This paper reviews the importance and legal concept of composition of board of directors in different countries and its role in corporate governance. Also by citing the challenges of this composition, it shows that presence of non-executive directors who are executive directors in other companies can improve boards' performance. We found that the new composition of board of directors and the presence of non-executive directors who are also executive directors in other firms can have a significant effect on the board's effectiveness especially when they are at the same industry. Finally, our results support that this kind of directors can enhance board’s supervisory and advisory roles by using their knowledge, experience and managerial skills and also can help to optimize the composition of board of directors.