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Japan Quants Say Independent Directors Do Boost Share Prices

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Days before Japan pushes companies to appoint more independent directors, quants at the nation’s second-biggest brokerage say they’ve found evidence that outsiders lead to better stock performance.

Companies on the Topix index with three or more independent board members delivered total returns that beat those with none by about 25 percentage points in the 2 1/2 years through April, quantitative analysis by Daiwa Securities Group Inc. shows. They also outperformed the Topix, while firms with one or two outsiders did roughly the same as the index.