Abstract

http://ssrn.com/abstract=405101
 
 

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Accounting for Taste: Board Member Preferences and Corporate Policy Choices


Scott A. Richardson


London Business School; AQR Capital Management, LLC

A. Irem Tuna


London Business School

Peter D. Wysocki


University of Miami - School of Business Administration

April 2003

MIT Sloan Working Paper No. 4307-03

Abstract:     
This paper explores whether firms that share common directors also pursue similar corporate policies. Using a sample of 885 U.S. firms with common directors, we find that director fixed effects strongly explain variation in firms' governance, financial, disclosure, and strategic policy choices. Moreover, the director fixed effects provide incremental explanatory power over traditional economic determinants of firms' policies. consistent with our hypotheses, the director effects are less pronounced in large firms, in firms with more outside board members, and for directors with numerous outside board appointments. Our evidence is more consistent with directors and firms "matching" their policy preferences rather than directors "imposing" their policy preferences on firms.

Number of Pages in PDF File: 45

Keywords: Board of Directors, Corporate Governance, Corporate Policies, Disclosure

JEL Classification: D21, G34, M41, M45

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Date posted: May 8, 2003  

Suggested Citation

Richardson, Scott A. and Tuna, A. Irem and Wysocki, Peter D., Accounting for Taste: Board Member Preferences and Corporate Policy Choices (April 2003). MIT Sloan Working Paper No. 4307-03. Available at SSRN: http://ssrn.com/abstract=405101 or http://dx.doi.org/10.2139/ssrn.405101

Contact Information

Scott Anthony Richardson
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
AQR Capital Management, LLC ( email )
Greenwich, CT
United States
Ayse Irem Tuna
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
Peter D. Wysocki (Contact Author)
University of Miami - School of Business Administration ( email )
Department of Accounting - K/E 308
5250 University Drive
Coral Gables, FL 33146-6531
United States
305-284-8618 (Phone)
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