Abstract

http://ssrn.com/abstract=1572838
 
 

References (138)



 
 

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Globalizing the Boardroom - The Effects of Foreign Directors on Corporate Governance and Firm Performance


Ronald W. Masulis


University of New South Wales - Australian School of Business; European Corporate Governance Institute (ECGI); Financial Research Network (FIRN)

Cong Wang


The Chinese University of Hong Kong (CUHK) - Department of Finance

Fei Xie


Clemson University

July 12, 2011

Journal of Accounting & Economics (JAE), Forthcoming
AFA 2011 Denver Meetings Paper
ECGI - Finance Working Paper No. 242/2009

Abstract:     
We examine the benefits and costs associated with foreign independent directors (FIDs) at U.S. corporations. We find that firms with FIDs make better cross-border acquisitions when the targets are from the home regions of FIDs. However, FIDs also display poor board meeting attendance records, and firms with FIDs are more prone to commit intentional financial misreporting and overpay their CEOs and have lower CEO turnover sensitivity to performance. Finally, firms with FIDs are associated with significantly poorer performance, especially as their business presence in the FID’s home region becomes less important.

Number of Pages in PDF File: 69

Keywords: Foreign Director, Board of Directors, Corporate Governance, Independent Director, Foreign Independent Director, Agency Costs, Board Monitoring, Cross-Border Acquisition, Earnings Restatement, Financial Misreporting, CEO Compensation, Board Attendance, Operating Performance, Tobin's Q

JEL Classification: G34

Accepted Paper Series


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Date posted: March 19, 2010 ; Last revised: January 8, 2012

Suggested Citation

Masulis, Ronald W. and Wang, Cong and Xie, Fei, Globalizing the Boardroom - The Effects of Foreign Directors on Corporate Governance and Firm Performance (July 12, 2011). Journal of Accounting & Economics (JAE), Forthcoming; AFA 2011 Denver Meetings Paper; ECGI - Finance Working Paper No. 242/2009. Available at SSRN: http://ssrn.com/abstract=1572838 or http://dx.doi.org/10.2139/ssrn.1572838

Contact Information

Ronald W. Masulis (Contact Author)
University of New South Wales - Australian School of Business ( email )
Sydney, NSW 2052
Australia
612-9385-5860 (Phone)
612-9385-6347 (Fax)

European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Cong Wang
The Chinese University of Hong Kong (CUHK) - Department of Finance ( email )
Shatin, N.T.
Hong Kong
(852)26961913 (Phone)
(852)26036586 (Fax)
Fei Xie
Clemson University ( email )
101 Sikes Ave
Clemson, SC 29634
United States
(864) 656-0774 (Phone)
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References:  138
Citations:  21

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