Director Busyness, Director Tenure and the Likelihood of Encountering Corporate Governance Problems
23 Pages Posted: 18 Jan 2011
Date Written: January 17, 2011
This paper examines the influence of two key director attributes on governance failures. More specifically, it examines the association between director tenure, director busyness and the likelihood of encountering governance problems. Results based on a logistic regression analysis of a sample of S&P 1500 directors indicate that long-serving directors and directors holding many board appointments are more likely to be associated with governance problems at the firms they oversee. These results reduce some of the inconclusiveness of prior research on the governance impacts of director busyness and tenure, and suggest the need to limit terms of service and cap the number of board appointments that can be held simultaneously.
Keywords: board of directors, director tenure, director busyness, multiple board appointments, corporate governance, governance failures
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