Director Connections in the Mutual Fund Industry

46 Pages Posted: 15 Mar 2012 Last revised: 30 Nov 2016

See all articles by Paul Calluzzo

Paul Calluzzo

Queen's University - Smith School of Business

Date Written: November 1, 2016


This paper examines the influence corporate executives sitting on mutual fund boards exert on the investment decisions of the fund. Our results show that funds bias their holdings toward the executive’s firm. Furthermore, we find that these funds trade informatively in the executive’s firm, in stocks in the same industry segment, and outperform funds that do not have an executive on their board. However, consistent with the executive also extracting benefits, we find that the fund provides price support for the executive’s firm around negative shocks. These results suggest that the role of fund directors extends beyond formal monitoring responsibilities.

Keywords: Mutual Funds, Board of Directors, Networks, Portfolio Choice, Information Advantage, Price Support

JEL Classification: G23, G34

Suggested Citation

Calluzzo, Paul, Director Connections in the Mutual Fund Industry (November 1, 2016). Available at SSRN: or

Paul Calluzzo (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6

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