57 Pages Posted: 11 Dec 2013 Last revised: 23 Apr 2017
Date Written: March 31, 2017
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: Suggested Citation