Better Directors or Distracted Directors? An International Analysis of Busy Boards
63 Pages Posted: 14 Aug 2017 Last revised: 30 Apr 2018
Date Written: February 13, 2018
Abstract
This study examines the effect of busy directors and boards on the value of a set of international firms from 1999-2012. We find that busy directors and boards are a global phenomenon. We discover that national culture helps to explain the cross-sectional variation in director and board busyness. We determine that firms with busy boards exhibit lower market-to-book ratios and reduced profitability. This effect, however, is reversed for younger firms. We conclude that the advising ability of these networked directors is useful for younger firms. A demographic analysis shows that multiple directorships are positively associated with firm performance and education, but negatively associated with female directors.
Keywords: Directors; Busy Boards; Governance; Culture
JEL Classification: G3; G34
Suggested Citation: Suggested Citation
Narayanan Jayaraman
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree St.
Atlanta, GA 30308
United States
404-894-4389 (Phone)
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