Learning from Directors’ Foreign Board Experiences

54 Pages Posted: 26 May 2017 Last revised: 20 Sep 2017

See all articles by Peter Iliev

Peter Iliev

Pennsylvania State University - Department of Finance

Lukas Roth

University of Alberta - Department of Finance and Statistical Analysis

Date Written: August 23, 2017

Abstract

We study the transfer of governance across countries through overlapping boards. Companies converge to the governance characteristics and board practices of foreign firms through their directors’ foreign board experiences. Learning from foreign firms’ governance practices is as important as learning from connected domestic firms, and increases with the number of directors with foreign board appointments. This learning is stronger in firms domiciled in less-developed governance markets, suggesting a potential channel through which better governance practices are propagated. Our results are also obtained when we use an exogenous shock to board practices, are present in the time series, and don’t exist in in placebo samples.

Keywords: Corporate Governance, Board Practices, Governance Convergence, Learning

JEL Classification: F30, G15, G34

Suggested Citation

Iliev, Peter and Roth, Lukas, Learning from Directors’ Foreign Board Experiences (August 23, 2017). University of Alberta School of Business Research Paper No. 2017-508. Available at SSRN: https://ssrn.com/abstract=2973496 or http://dx.doi.org/10.2139/ssrn.2973496

Peter Iliev (Contact Author)

Pennsylvania State University - Department of Finance ( email )

348 Business Building
University Park, PA 16802
United States

Lukas Roth

University of Alberta - Department of Finance and Statistical Analysis ( email )

2-32E Business Building
Edmonton, Alberta T6G 2R6
Canada
780-492-4431 (Phone)
780-492-3325 (Fax)

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