Are All Inside Directors the Same? Evidence from the External Directorship Market

• 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 FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2011.01653.x
• 发表日期: 2011
• 页码: 823-872
• 关键词: CORPORATE GOVERNANCE; firm performance; AGENCY COSTS; BOARD SIZE; OWNERSHIP; determinants; COMPENSATION; specification; CONSEQUENCES; RESTATEMENTS

摘要

Agency theory and optimal contracting theory posit opposing roles and shareholder wealth effects for corporate inside directors. We evaluate these theories using the market for outside directorships to differentiate among inside directors. Firms with inside directors holding outside directorships have better operating performance and market-to-book ratios, especially when monitoring is more difficult. These firms make better acquisition decisions, have greater cash holdings, and overstate earnings less often. Announcements of outside board appointments improve shareholder wealth, while departure announcements reduce it, consistent with these inside directors improving board performance and outside directorships being an important source of inside director incentives.