Do Director Elections Matter?

67 Pages Posted: 24 May 2015 Last revised: 6 Jul 2017

See all articles by Vyacheslav Fos

Vyacheslav Fos

Boston College - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Kai Li

University of British Columbia (UBC) - Sauder School of Business; China Academy of Financial Research (CAFR)

Margarita Tsoutsoura

Cornell University; National Bureau of Economic Research (NBER)

Date Written: July 5, 2017


Using a hand-collected sample of election nominations for more than 30,000 directors over the period 2001–2010, we construct a novel measure of director proximity to elections called Years-to-election. We find that the closer directors of a board are to their next elections, the higher CEO turnover-performance sensitivity is. A series of tests, including one that exploits variation in Years-to-election that comes from other boards, supports a causal interpretation. Further analyses show that other governance mechanisms do not drive the relation between board Years-to-election and CEO turnover-performance sensitivity. We conclude that director elections have important implications for corporate governance.

Keywords: director elections; director nominations; staggered boards; CEO turnover–performance sensitivity; agency problems; corporate governance

JEL Classification: G34, G38

Suggested Citation

Fos, Vyacheslav and Li, Kai and Tsoutsoura, Margarita, Do Director Elections Matter? (July 5, 2017). Chicago Booth Research Paper No. 17-08. Available at SSRN: or

Vyacheslav Fos (Contact Author)

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

Kai Li

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
604-822-8353 (Phone)
604-822-4695 (Fax)


China Academy of Financial Research (CAFR)

1954 Huashan Road
Shanghai P.R.China, 200030

Margarita Tsoutsoura

Cornell University ( email )

Ithaca, NY 14853
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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