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The Determinants and Performance Impact of Outside Board Leadership

60 Pages Posted: 17 Mar 2009 Last revised: 14 Jan 2015

Steven Balsam

Temple University - Department of Accounting

John Puthenpurackal

University of Nevada, Las Vegas - Department of Finance

Arun Upadhyay

Florida International University

Date Written: December 9, 2014

Abstract

Outside board chairs are more likely in firms that are smaller, have greater stock volatility and R&D intensity, have a lower proportion of inside directors and less institutional ownership, and when CEOs have shorter tenure and lower ownership. We also find the existence of an outside chair associated with geographical and industry norms. An outside chair is positively associated with firm performance, a finding robust to various estimation methods including event study and multivariate analyses incorporating controls for endogeneity, as well as market and accounting measures of performance. We note however, the outside chair-firm performance relationship varies with firm characteristics.

Suggested Citation

Balsam, Steven and Puthenpurackal, John and Upadhyay, Arun, The Determinants and Performance Impact of Outside Board Leadership (December 9, 2014). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: https://ssrn.com/abstract=1361255 or http://dx.doi.org/10.2139/ssrn.1361255

Steven Balsam

Temple University - Department of Accounting ( email )

306 Speakman Hall
Philadelphia, PA 19122
United States
215-204-5574 (Phone)
215-204-5587 (Fax)

HOME PAGE: http://www.sbm.temple.edu/~drb/

John Puthenpurackal (Contact Author)

University of Nevada, Las Vegas - Department of Finance ( email )

4505 S. Maryland Parkway
Box 456008
Las Vegas, NV 89154-6008
United States

Arun Upadhyay

Florida International University ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

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