Too Busy or Well-Connected? Evidence from a Shock to Multiple Directorships

被引:45
作者
Brown, Anna Bergman [1 ]
Dai, Jing [2 ]
Zur, Emanuel [3 ]
机构
[1] Univ Connecticut, Storrs, CT 06269 USA
[2] Southwestern Univ Finance & Econ, Chengdu, Sichuan, Peoples R China
[3] Univ Maryland, College Pk, MD 20742 USA
基金
中国国家自然科学基金;
关键词
multiple directorships; board busyness; board connections; M&A; corporate governance; CORPORATE GOVERNANCE; BOARD SIZE; DETERMINANTS; EARNINGS; ACCRUALS; COMPENSATION; INTERLOCKS; QUALITY; COSTS;
D O I
10.2308/accr-52165
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Prior literature documents that multiple directorships are negatively associated with operating performance due to overly busy directors; however, multiple directorships may also increase firm value because directors gain access to valuable connections, resources, and information through their multiple appointments. This paper examines M&A that terminate target firms' entire boards as a negative shock to both board busyness and connections at other firms, as a complement to Hauser (2018). We document that firms experiencing a decrease in multiple directorships due to M&A exhibit improved operating performance, monitoring, and strategic advising, on average. Firms with the smallest decrease in board connections experience the greatest improvement in operating performance and advising, while firms with the greatest decrease in board connections experience null or negative effects on operating performance and advising. Our findings provide new evidence of the costs and benefits of multiple directorships based on board busyness and connections.
引用
收藏
页码:83 / 104
页数:22
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