What's Happened over the Past 10 Years to the Selection of Retired CEOs as Board Members?
Hanyang University - Seoul Campus; Harvard University - Edmond J. Safra Center for Ethics
May 22, 2007
CAEPR Working Paper No. 2007-007
I analyze directorships held by CEOs who retired during 1989-1993 and during 1998-2002. My results suggest that retired CEOs became more popular on boards. Also, although pre-retirement accounting performance helps explain the number of outside directorships a retired CEO held in the 1989-1993 sample as Brickley, Linck, and Coles (1999) found, it does not in the 1998-2002 sample. Third, a company's stock performance during a CEO's tenure affects whether he became an inside director of that company after retirement. A 25% change in stock price performance increased the probability by 11% in the 1989-1993 sample, and 51% in the 1998-2002 sample. Finally, if a retired CEO worked in a regulated industry, his probability of serving at least one outside directorship fell by 34% in the 1989-1993 sample, and 24% in the 1998-2002 sample.
Number of Pages in PDF File: 23
Keywords: Corporate governance, Board of director, Deregulation
JEL Classification: G34, G38, L10, L51working papers series
Date posted: May 22, 2007 ; Last revised: April 14, 2013
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