Director Reputation, Settling-Up, and the Market for Boardroom Talent

65 Pages Posted: 25 Nov 2019

See all articles by Mark A. Chen

Mark A. Chen

Georgia State University - Robinson College of Business

Hai Tran

Loyola Marymount University - Department of Finance and Computer Information Systems

Qinxi Wu

Baylor University - Hankamer School of Business

Evgenia Zhivotova

University of Amsterdam Business School

Date Written: November 5, 2019

Abstract

We examine how individual directors’ reputation affects their career outcomes in the labor market for boardroom talent. Using unique data on prestigious director awards, we find that individuals who experience positive reputational shocks tend to be rewarded with new board seats at firms that rank high in terms of size or public prestige. In addition, consistent with theories of career concerns and labor-market signaling, we find that these reputational effects are greater for younger directors and for non-overboarded directors. Overall, our findings provide new, clear-cut evidence of strong reputational rewards and ex post settling-up in the market for boardroom talent.

Keywords: Boards, directors, reputation, director awards, settling-up, career concerns, external labor markets

JEL Classification: G30, G31, G34

Suggested Citation

Chen, Mark A. and Tran, Hai and Wu, Qinxi and Zhivotova, Evgenia, Director Reputation, Settling-Up, and the Market for Boardroom Talent (November 5, 2019). Available at SSRN: https://ssrn.com/abstract=3481519 or http://dx.doi.org/10.2139/ssrn.3481519

Mark A. Chen

Georgia State University - Robinson College of Business ( email )

35 Broad Street
Suite 1230
Atlanta, GA 30303-3083
United States

Hai Tran (Contact Author)

Loyola Marymount University - Department of Finance and Computer Information Systems ( email )

Los Angeles, CA 90045
United States
3103387409 (Phone)

HOME PAGE: http://www.haitranv.com

Qinxi Wu

Baylor University - Hankamer School of Business ( email )

Waco, TX 76798
United States

Evgenia Zhivotova

University of Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

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