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Are outside directors with greater board tenure valuable? Evidence from the last credit crisis q
Journal article   Peer reviewed

Are outside directors with greater board tenure valuable? Evidence from the last credit crisis q

Nuno Fernandes and Eliezer M. Fich
Journal of accounting and public policy, v 42(1)
01 Jan 2023

Abstract

Business & Economics Business, Finance Public Administration Social Sciences
Analyses of bank performance around the 2007-2008 financial crisis indicate that outside directors with financial experience acquired through longer board service at their own banks are more effective than those with financial experience acquired elsewhere. Institutions with more long-tenured independent directors (i) earn higher Cumulative Abnormal Returns (CARs) around the collapse of both Bear Stearns and Lehman Brothers, (ii) limit their risk exposure before the crisis, (iii) exhibit better stock return and accounting performance during the crisis, (iv) are less likely to be bailed out by the U.S. government's Troubled Assets Relief Program (TARP), and (v) receive proportionally less financial assis-tance from TARP. CO 2022 Elsevier Inc. All rights reserved.

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Business, Finance
Public Administration
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