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
Date Written: July 1, 2020
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
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