Abstract

http://ssrn.com/abstract=1875710
 
 

References (28)



 
 

Citations (1)



 


 



Director Characteristics and Firm Performance


Pascal A. Gantenbein


University of Basel

Christophe Volonté


University of Basel

January 21, 2013


Abstract:     
The traditional methodology of studies examining optimal composition of boards typically relates a simple board variable (e.g., independence of board members or board demography) to firm performance, at the same time ignoring many other potentially relevant board characteristics. In reality, however, board members predominantly are selected upon their business skills. Given the practical importance of these criteria, we investigate how directors’ education and business experience affect firm performance. The sample consists of 4,027 directorships from 559 firm-year observations in Switzerland. Using OLS and including control variables, we show that boards on average are composed according to the firms’ needs in terms of education and industrial knowledge. Furthermore, industrial knowledge and Tobin’s Q are negatively correlated especially if the firm has more divisions, showing that in highly diversified firms, general management skills are more important as opposed to specific industrial knowledge. In addition, director fixed effects, i.e. unobserved characteristics such as, e.g., talent, are significant and improve the explanatory power of the models by 5 percent.

Number of Pages in PDF File: 26

Keywords: Corporate governance, Board of directors, Director characteristics, Education and business experience

JEL Classification: G30, G34, G38

working papers series


Download This Paper

Date posted: July 1, 2011 ; Last revised: January 22, 2013

Suggested Citation

Gantenbein, Pascal A. and Volonté, Christophe, Director Characteristics and Firm Performance (January 21, 2013). Available at SSRN: http://ssrn.com/abstract=1875710 or http://dx.doi.org/10.2139/ssrn.1875710

Contact Information

Pascal A. Gantenbein
University of Basel ( email )
Petersplatz 1
Basel, CH-4003
Switzerland
HOME PAGE: http://wwz.unibas.ch/abteilungen/home/abteilung/fmgt/
Christophe Volonté (Contact Author)
University of Basel ( email )
Peter Merian-Weg 6
Basel, CH-4002
Switzerland
Feedback to SSRN


Paper statistics
Abstract Views: 1,139
Downloads: 234
Download Rank: 71,754
References:  28
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.282 seconds