Hedge Fund Boards and the Market for Independent Directors

58 Pages Posted: 12 Dec 2014 Last revised: 8 Nov 2017

See all articles by Christopher P. Clifford

Christopher P. Clifford

University of Kentucky

Jesse A. Ellis

North Carolina State University

William Christopher Gerken

University of Kentucky - Finance

Date Written: March 11, 2017

Abstract

We provide the first examination of hedge fund boards and their directors. The majority of directorships are held by extremely busy independent directors. These directors are sought after by funds because they have more reputational capital at stake, making them independent and credible monitors whose presence can certify fund quality to investors. Busy independent directors are more likely to be hired by high quality funds, and their departure from the board is associated with investor withdrawals. Moreover, funds with busy independent directors are less likely to commit fraud, abuse discretionary liquidity restrictions, or engage in performance-based risk shifting.

Keywords: hedge fund, hedge fund governance, directors, reputation

Suggested Citation

Clifford, Christopher P. and Ellis, Jesse A. and Gerken, William Christopher, Hedge Fund Boards and the Market for Independent Directors (March 11, 2017). Available at SSRN: https://ssrn.com/abstract=2537253 or http://dx.doi.org/10.2139/ssrn.2537253

Christopher P. Clifford

University of Kentucky ( email )

College of Business & Economics
Lexington, KY 40506-0034
United States
859-257-3850 (Phone)

Jesse A. Ellis

North Carolina State University ( email )

Poole College of Management
Campus Box 7229
Raleigh, NC 27695
United States
919-515-9670 (Phone)

William Christopher Gerken (Contact Author)

University of Kentucky - Finance ( email )

College of Business & Economics
Lexington, KY 40506-0034
United States

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
357
Abstract Views
2,148
rank
99,886
PlumX Metrics