Grounded in agency theory, I examine whether lead independent directors (LIDs) influence corporate payout policy. Using a panel of 29,786 U.S. firm-year observations from 2001 to 2021, I find that firms with a LID are more likely to pay dividends and tend to distribute higher amounts. The findings remain robust when using alternative model specifications and different measures of dividend behavior. Identification tests including propensity score matching, instrumental variables, and difference-in-differences suggest that the documented relationship is unlikely to be driven by endogeneity. For additional analysis, I examine the possible channels that drive the effect of LIDs on payout decisions. The results indicate that LIDs strengthen the effectiveness of independent directors by enhancing monitoring, advising, and the willingness to challenge management. These governance improvements provide a plausible mechanism through which LIDs influence corporate policies, including firms’ payout decisions. Further, I show that the positive effect appears only among firms with weaker governance environments and when monitoring demands are greater. I also find that firms with a LID on the board are more likely to adjust their payout behavior in situations where raising external capital is difficult and monitoring pressure is elevated. Taken together, the evidence highlights how leadership structure interacts with financial policy. The findings have practical relevance for shareholders, regulators, governance advocates, and investors, as they show that board leadership arrangements can meaningfully shape corporate payout decisions.