Aren’t All Directors Busy? Evidence from Director Workload and Attendance

64 Pages Posted: 27 Jun 2013 Last revised: 24 Feb 2014

See all articles by Stephen Gray

Stephen Gray

University of Queensland - Business School; Duke University - Fuqua School of Business; Financial Research Network (FIRN)

John Nowland

City University of Hong Kong

Date Written: December 18, 2013

Abstract

All directors, not only those with multiple directorships, are potentially too busy to fulfill their directorial duties. Thus, as a general test of director busyness, we examine how changes in workloads (board and committee meeting frequency) affect the attendance practices of CEOs and directors. We find that attendance rates for both outside and inside directors decrease (non-random absences increase) when they are required to attend more board meetings. The marginal effect is that the average outside (inside) director has a 14 percent (12 percent) likelihood of missing an additional board meeting. Further analysis shows that this negative relationship between board meetings and attendance rates is consistent across directorships in a range of firms, including when more meetings are associated with poor performance, M&A activity and CEO turnover. The results for committee meetings are mixed, highlighting that director attendance is not consistent across different types of meetings. In summary, our analysis indicates that the average director is busy and has a limited ability to attend additional board meetings. Thus, any benefits firms obtain from holding additional meetings are being eroded by lower director attendance.

Keywords: attendance, board of directors, busy directors, CEOs, meeting frequency, workload

Suggested Citation

Gray, Stephen and Nowland, John, Aren’t All Directors Busy? Evidence from Director Workload and Attendance (December 18, 2013). Available at SSRN: https://ssrn.com/abstract=2285344 or http://dx.doi.org/10.2139/ssrn.2285344

Stephen Gray

University of Queensland - Business School ( email )

University of Queensland
Brisbane, Queensland 4072
Australia

Duke University - Fuqua School of Business

Box 90120
Durham, NC 27708-0120
United States

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

John Nowland (Contact Author)

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
China

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