How valuable are independent directors? Evidence from external distractions

• 成果类型: Article
• 署名作者: Masulis, Ronald W.; Zhang, Emma Jincheng
• 署名单位: University of New South Wales Sydney; Monash University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.02.014
• 发表日期: 2019
• 页码: 226-256
• 关键词: Independent directors; Director incentives; Director distraction; corporate performance

摘要

We provide new evidence on the value of independent directors by exploiting exogenous events that seriously distract independent directors. Approximately 20% of independent directors are significantly distracted in a typical year. They attend fewer meetings, trade less frequently in the firm's stock, and resign from the board more frequently, indicating declining firm-specific knowledge and a reduced board commitment. Firms with more preoccupied independent directors have declining firm valuation and operating performance and exhibit weaker merger and acquisition (M&A) profitability and accounting quality. These effects are stronger when distracted independent directors play key board monitoring roles and when firms require greater director attention. (C) 2018 Elsevier B.V. All rights reserved.