Journal article
Director Appointments: It Is Who You Know
The Review of financial studies, v 35(4), pp 1933-1982
21 Mar 2022
Abstract
Using 9,801 director appointments during 2003-2014, we document the dramatic impact of connections. Sixty-nine percent of new directors have professional ties to incumbent boards, a group representing 13% of all potential candidates. Consistent with facilitating coordination and reducing search costs, connections help boards bring in gender diversity, new skills, and new industry background. More complex firms and firms in more competitive environments tend to appoint connected directors and experience better market reactions and higher shareholder votes. Connections to incumbent CEOs, however, result in lower announcement returns and shareholder votes. We use death (merger)-induced network loss (gain) as instruments.
Metrics
Details
- Title
- Director Appointments: It Is Who You Know
- Creators
- Jay Cai - Drexel Univ, LeBow Coll Business, Philadelphia, PA 19104 USATu Nguyen - University of WaterlooRalph Walkling - Drexel University
- Publication Details
- The Review of financial studies, v 35(4), pp 1933-1982
- Publisher
- Oxford Univ Press
- Number of pages
- 50
- Grant note
- LeBow College of Business Stratakis Chair in Corporate Governance
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000764617600001
- Scopus ID
- 2-s2.0-85127863163
- Other Identifier
- 991019167839904721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics