Distracted directors: Does board busyness hurt shareholder value?

• 成果类型: Article
• 署名作者: Falato, Antonio; Kadyrzhanova, Dalida; Lel, Ugur
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; University System of Maryland; University of Maryland College Park; Virginia Polytechnic Institute & State University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.05.005
• 发表日期: 2014
• 页码: 404-426
• 关键词: Busy directors; Multiple directorship; Firm valuation; independent directors; Director and CEO death

摘要

We use the deaths of directors and chief executive officers as a natural experiment to generate exogenous variation in the time and resources available to independent directors at interlocked firms. The loss of such key co-employees is an attention shock because it increases the board committee workload only for some interlocked directors the 'treatment group'. There is a negative stock market reaction to attention shocks only for treated director-interlocked firms. Interlocking directors' busyness, the importance of their board roles, and their degree of independence magnify the treatment effect. Overall, directors' busyness is detrimental to board monitoring quality and shareholder value. (C) 2014 Elsevier B.V. All rights reserved.