Busy directors and firm performance: Evidence from mergers

• 成果类型: Article
• 署名作者: Hauser, Roie
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University; Ono Academic College
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.01.009
• 发表日期: 2018
• 页码: 16-37
• 关键词: Board of directors; BOARD COMPOSITION; Busy boards; corporate governance

摘要

This paper studies whether director appointments to multiple boards impact firm outcomes. To overcome endogeneity of board appointments, I exploit variation generated by mergers that terminate entire boards and thus shock the appointments of those terminated directors. Reductions of board appointments are associated with higher profitability, market-to-book, and likelihood of directors joining board committees. The performance gains are particularly stark when directors are geographically far from firm headquarters. I conclude that the effect of the shocks to board appointments is: (i) evidence that boards matter; and (ii) plausibly explained by a workload channel: when directors work less elsewhere, their companies benefit. (C) 2018 Elsevier B.V. All rights reserved.