Outside directors and board advising and monitoring performance

• 成果类型: Article
• 署名作者: Kim, Kyonghee; Mauldin, Elaine; Patro, Sukesh
• 署名单位: University of Missouri System; University of Missouri Columbia; Northern Illinois University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2014.02.001
• 发表日期: 2014
• 关键词: CORPORATE GOVERNANCE; operating performance; Financial expertise; audit committees; BIDDING FIRMS; AGENCY COSTS; determinants; COMPENSATION; APPOINTMENTS; OWNERSHIP

摘要

Divergent views exist about whether boards must tradeoff advising for monitoring performance when utilizing outside versus inside directors. We suggest a dichotomous tradeoff focus underestimates outside directors' impact on board performance. We find outside director tenure positively associated with firm acquisition/investment policy advising performance and CEO compensation monitoring performance, suggesting that advising and monitoring do not always compete for directors' time. However, tenure is not a panacea it marginally weakens financial reporting monitoring performance which is instead enhanced by outside directors' financial expertise. Overall, the results suggest outside director tenure and diverse expertise support both advising and monitoring performance. (C) 2014 Elsevier B.V. All rights reserved.