Financial expertise of directors

• 成果类型: Article
• 署名作者: Guner, A. Burak; Malmendier, Ulrike; Tatec, Geoffrey
• 署名单位: University of California System; University of California Berkeley; Barclays; University of California System; University of California Los Angeles
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2007.05.009
• 发表日期: 2008
• 页码: 323-354
• 关键词: CORPORATE GOVERNANCE; Board of directors; finance experts; Sarbanes-Oxley; Agency conflicts

摘要

We analyze how directors with financial expertise affect corporate decisions. Using a novel panel data set, we find that financial experts exert significant influence, though not necessarily in the interest of shareholders. When commercial bankers join boards, external funding increases and investment-cash flow sensitivity decreases. However, the increased financing flows to firms with good credit but poor investment opportunities. Similarly, investment bankers on boards are associated with larger bond issues but worse acquisitions. We find little evidence that financial experts affect compensation policy. The results suggest that increasing financial expertise on boards may not benefit shareholders if conflicting interests (e.g., bank profits) are neglected. (C) 2008 Elsevier B.V. All rights reserved.