The Diversity of Expertise on Corporate Boards in Australia
35 Pages Posted: 3 Jun 2017
Date Written: June 2017
Abstract
Expertise diversity is expected to enhance the monitoring and advising functions of boards of directors. Yet, little is known about the expertise that actually exists on corporate boards. In this study, we examine the diversity of professional expertise on corporate boards in Australia and implications for shareholder value. We categorise directors by 11 types of professional expertise and find the most common types of expertise are business executives, accountants, bankers, scientists, lawyers and engineers. We find that expertise diversity is primarily related to board size, industry and location. Our analysis also suggests that shareholders benefit when boards diversify their expertise within a subset of specialist business expertise (lawyers, accountants, consultants, bankers and outside CEOs). Further diversity beyond this subset of expertise is associated with lower firm value and performance.
Keywords: Board of directors, Director appointments, Diversity, Firm value, Professional expertise
Suggested Citation: Suggested Citation
Duke University - Fuqua School of Business
Box 90120
Durham, NC 27708-0120
United States
Financial Research Network (FIRN) ( email )
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
Do you have a job opening that you would like to promote on SSRN?
The Diversity of Expertise on Corporate Boards in Australia
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $42.00 .
File name: ACFI.pdf
Size: 0K
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
