Human and Social Capital in the Labor Market for Directors

33 Pages Posted: 29 Jan 2016

See all articles by George D. Cashman

George D. Cashman

Marquette University; Texas Tech University

Stuart Gillan

University of Georgia - Department of Finance

Ryan J. Whitby

Utah State University - Huntsman School of Business

Date Written: 2013

Abstract

We examine the director labor market to better understand which director attributes are important for board service. We find that general skills and director connections are valued in the market for directors in that both increase the likelihood of individuals gaining a board seat. Among specific director characteristics, financial expertise, holding an MBA degree, and S&P 500 experience are positively associated with gaining new board appointments. Moreover, regardless of the director’s level of expertise, highly connected individuals are more likely to obtain new appointments. Finally, from a range of characteristics, only director connections mitigate the negative consequences of serving on the boards of firms that restate their financials.

Keywords: Boards of Directors, Human Capital, Social Capital, Director Selection, Director Effectiveness, Networks

Suggested Citation

Cashman, George D. and Gillan, Stuart L. and Whitby, Ryan J., Human and Social Capital in the Labor Market for Directors (2013). Advances in Financial Economics, Vol. 16, 2013. Available at SSRN: https://ssrn.com/abstract=2724068

George D. Cashman

Marquette University ( email )

College of Business Administration
P.O. Box 1881
Milwaukee, WI 53201-1881
United States
4142881448 (Phone)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Stuart L. Gillan

University of Georgia - Department of Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States

Ryan J. Whitby (Contact Author)

Utah State University - Huntsman School of Business ( email )

3500 Old Main Hill
Logan, UT 84322-3500
United States
435.797.9495 (Phone)

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