Director Appointments: It Is Who You Know

• 成果类型: Article
• 署名作者: Cai, Jay; Nguyen, Tu; Walkling, Ralph
• 署名单位: Drexel University; University of Waterloo; University System of Ohio; Ohio State University; Drexel University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab064
• 发表日期: 2022
• 页码: 1933
• 关键词: CORPORATE BOARDS; GENDER; centrality; FEATHER; finance; MARKET; COSTS; women; birds

摘要

Using 9,801 director appointments during 2003-2014, we document the dramatic impact of connections. Sixty-nine percent of new directors have professional ties to incumbent boards, a group representing 13% of all potential candidates. Consistent with facilitating coordination and reducing search costs, connections help boards bring in gender diversity, new skills, and new industry background. More complex firms and firms in more competitive environments tend to appoint connected directors and experience better market reactions and higher shareholder votes. Connections to incumbent CEOs, however, result in lower announcement returns and shareholder votes. We use death (merger)-induced network loss (gain) as instruments.