New Kids on the Block: The Effect of Generation X Directors on Corporate Performance
48 Pages Posted: 18 Mar 2020
Date Written: February 18, 2020
Generation X directors are slowly replacing Baby Boomers on U.S. corporate boards and will eventually dominate corporate boardrooms in the U.S. and around the world. We provide the first robust evidence of a significantly positive effect of Generation X directors on corporate performance. The positive effect is not driven by other director attributes such as age, sex, ethnicity, or professional expertise, and is robust to endogeneity checks using instrumental variables. Part of the improvement in firm performance can be attributed to the commitment of Generation X directors to corporate social responsibility and to the inclusion of women on corporate boards.
Keywords: Board structure, Board diversity, Generation X, Firm performance, female directors, corporate social responsibility, CSR, ESG
JEL Classification: G34
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