Director Skill Sets

57 Pages Posted: 11 Dec 2013 Last revised: 23 Apr 2017

Renee B. Adams

University of New South Wales, Department of Banking and Finance; ECGI; FIRN; ABFER

Ali C. Akyol

University of Melbourne - Department of Finance; Financial Research Network (FIRN)

Patrick Verwijmeren

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: March 31, 2017

Abstract

Directors are not one-dimensional. We characterize their skill sets by exploiting Regulation S-K’s 2009 requirement that U.S. firms must disclose the experience, qualifications, attributes or skills that led the nominating committee to choose an individual as a director. We then examine how skills cluster on and across boards. Factor analysis indicates that the main dimension along which boards vary is in the diversity of skills of their directors. We find that firm performance increases when director skill sets exhibit more commonality.

Keywords: Directors; Qualifications; Expertise; Skills; Board effectiveness; Regulation S-K; Diversity

JEL Classification: G34

Suggested Citation

Adams, Renee B. and Akyol, Ali C. and Verwijmeren, Patrick, Director Skill Sets (March 31, 2017). Available at SSRN: https://ssrn.com/abstract=2365748 or http://dx.doi.org/10.2139/ssrn.2365748

Renée B. Adams

University of New South Wales, Department of Banking and Finance ( email )

Sydney, NSW 2052
Australia
+61(2)93854280 (Phone)

ECGI

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

FIRN

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

HOME PAGE: http://www.firn.org.au

ABFER

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Ali C. Akyol (Contact Author)

University of Melbourne - Department of Finance ( email )

198 Berkeley Street
Faculty of Economics and Commerce
Carlton VIC 3010, Victoria 3010
Australia
+61 (3) 8344-5318 (Phone)
+61 (3) 8344-6914 (Fax)

HOME PAGE: http://www.aliakyol.com

Financial Research Network (FIRN)

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

HOME PAGE: http://www.firn.org.au

Patrick Verwijmeren

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

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