Independent director incentives: Where do talented directors spend their limited time and energy?

• 成果类型: Article
• 署名作者: Masulis, Ronald W.; Mobbs, Shawn
• 署名单位: University of New South Wales Sydney; University of Alabama System; University of Alabama Tuscaloosa
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2013.10.011
• 发表日期: 2014
• 页码: 406-429
• 关键词: Director incentives; Busy directors; labor markets; Firm reputation; firm performance

摘要

We study reputation incentives in the director labor market and find that directors with multiple directorships distribute their effort unequally based on the directorship's relative prestige. When directors experience an exogenous increase in a directorship's relative ranking, their board attendance rate increases and subsequent firm performance improves. Also, directors are less willing to relinquish their relatively more prestigious directorships, even when firm performance declines. Finally, forced Chief Executive Officer departure sensitivity to poor performance rises when a larger fraction of independent directors view the board as relatively more prestigious. We conclude that director reputation is a powerful incentive for independent directors. (C) 2013 Elsevier B.V. All rights reserved.