Do Long-Tenured Boards Provide Stability?

42 Pages Posted: 18 Sep 2019 Last revised: 30 Mar 2021

See all articles by Joon Ho Kim

Joon Ho Kim

University of Hawaii at Manoa

Wei-Ming Lee

University of Exeter

Date Written: March 30, 2021


This paper investigates whether average director tenure affects a firm's performance variability. We find that a one standard deviation increase in the average director tenure is associated with a 7.15% proportional decrease in annualized return volatility. A likely explanation is that long-tenured boards prefer the quiet life and make persistent and predictable policies. Consistent with this hypothesis, we find that firms with long-tenured boards have smoother investment patterns and more stable cash flows. Our work contributes to the growing literature that corporate governance can affect firm risk.

Keywords: board of directors, return volatility, director tenure

JEL Classification: G3

Suggested Citation

Kim, Joon Ho and Lee, Wei-Ming, Do Long-Tenured Boards Provide Stability? (March 30, 2021). Available at SSRN: or

Joon Ho Kim

University of Hawaii at Manoa ( email )

2404 Maile Way
Honolulu, HI 96822
United States

Wei-Ming Lee (Contact Author)

University of Exeter ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom

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