Board Overlap, Seat Accumulation, and Share Prices
INSEAD - Finance
Claudio F. Loderer
University of Berne - Institute for Financial Management; European Corporate Governance Institute (ECGI); Swiss Finance Institute
September 5, 2001
EFMA 2001 Lugano Meetings
We examine the board overlap among firms listed in Switzerland. Collusion, managerial entrenchment, and financial participation cannot explain it. The overlap appears to be induced by banks and by the accumulation of seats by the most popular directors. We also document that seat accumulation is negatively related to firm value, possibly because of the conflicts of interest that multiple directorships induce and the time constraints that directors face. Contrary to popular beliefs, however, the directors of traded firms do not generally hold more than one mandate in other traded firms. They do, however, hold multiple seats in nontraded firms.
Number of Pages in PDF File: 40
Date posted: June 14, 2001
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