CEO Outside Directorships and Managerial Efficiency: The Role of Host Board Capital

Corporate Governance: An International Review, Volume 29, pp. 45-66, 2021

Posted: 23 Sep 2020 Last revised: 20 Jun 2021

See all articles by Canan Mutlu

Canan Mutlu

Kennesaw State University - Michael J. Coles College of Business

Sunay Mutlu

Kennesaw State University - Michael J. Coles College of Business

Steve Sauerwald

University of Illinois at Chicago; University of Illinois at Chicago

Date Written: July 1, 2020

Abstract

We explore the value of CEO outside directorships on managerial efficiency by identifying a unique empirical setting where a CEO’s number of outside board seats is exogenously decreased by a merger that eliminates the board of a host firm the CEO is serving on. Using this event as our empirical instrument, we find that outside directorships decrease a CEO’s managerial efficiency while host board capital reduces this effect.

Keywords: Agency theory, board capital theory, board of directors, CEO managerial efficiency, CEO outside directorships

Suggested Citation

Mutlu, Canan and Mutlu, Sunay and Sauerwald, Steve and Sauerwald, Steve, CEO Outside Directorships and Managerial Efficiency: The Role of Host Board Capital (July 1, 2020). Corporate Governance: An International Review, Volume 29, pp. 45-66, 2021, Available at SSRN: https://ssrn.com/abstract=3670408

Canan Mutlu

Kennesaw State University - Michael J. Coles College of Business ( email )

1000 Chastain Road
Kennesaw, GA 30144
United States

Sunay Mutlu (Contact Author)

Kennesaw State University - Michael J. Coles College of Business ( email )

1000 Chastain Road
Kennesaw, GA 30144
United States

Steve Sauerwald

University of Illinois at Chicago

1200 W Harrison St
Chicago, IL 60607
United States

HOME PAGE: ssauerw@uic.edu

University of Illinois at Chicago ( email )

6014 S Morgan Street
2210 UH
Chicago, IL 60130
United States

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