This paper explores how the structure and composition of the board of directors influence crucial decisions made in the firm, especially in the early years after a massive corporate governance reform towards an Anglo-Saxon system. With a sample of large Korean firms in 2000 ~ 2003, we examined the impact of board independence and demographic diversity on R&D investment. After controlling relevant variables, the ratio of outside directors as well as the diversity in educational and functional backgrounds among outside directors was positively related to R&D intensity. We also considered the effects of ownership structure to find that board independence was more strongly, positively related to R&D investment when institutional ownership is higher rather than low. Implications and future research direction are discussed.