Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments
38 Pages Posted: 21 Jun 1999
There are 2 versions of this paper
Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments
Date Written: June 2002
Abstract
We examine the number of external appointments held by corporate directors. Directors who serve larger firms and sit on larger boards are more likely to attract additional directorships. Consistent with Fama and Jensen (1983), we find that firm performance has a positive effect on the number of appointments held by a director. We find no evidence that multiple directors shirk their responsibilities to serve on board committees. We also do not find that multiple directors are associated with a greater likelihood of securities fraud litigation. We conclude that the evidence does not support calls for limits on directorships held by an individual.
JEL Classification: G34, K22
Suggested Citation: Suggested Citation
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