Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments

38 Pages Posted: 21 Jun 1999

See all articles by Adam C. Pritchard

Adam C. Pritchard

University of Michigan Law School

Stephen P. Ferris

University of Missouri at Columbia - Department of Finance

Murali Jagannathan

SUNY at Binghamton - School of Management

Multiple version iconThere are 2 versions of this paper

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

Pritchard, Adam C. and Ferris, Stephen P. and Jagannathan, Murali, Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments (June 2002). University of Michigan Law School, Working Paper No. 99-013; CORI Working Paper No. 2001-02, Available at SSRN: https://ssrn.com/abstract=167288 or http://dx.doi.org/10.2139/ssrn.167288

Adam C. Pritchard (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
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Stephen P. Ferris

University of Missouri at Columbia - Department of Finance ( email )

214 Middlebush Hall
Columbia, MO 65211
United States
573-882-6272 (Phone)
573-884-6296 (Fax)

Murali Jagannathan

SUNY at Binghamton - School of Management ( email )

P.O. Box 6015
Binghamton, NY 13902-6015
United States
607-777-4639 (Phone)

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