Are All Inside Directors the Same? Evidence from the External Directorship Market

Journal of Finance

Volumn 66, Issue 3, 2011, Pages 823-872

  Masulis, Ronald W ^a   Mobbs, Shawn ^b  

^a UNIVERSITY OF NEW SOUTH WALES   (Australia)

^b UNIVERSITY OF ALABAMA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79956279139     PISSN: 00221082     EISSN: 15406261     Source Type: Journal    
DOI: 10.1111/j.1540-6261.2011.01653.x     Document Type: Article

References (56)

1. Acharya, Viral, Stewart Myers, and Raghuram Rajan, 2009, The internal governance of firms, NBER Working paper 15568, New York University.
2. Adams, Renée, Heitor Almeida, and Daniel Ferreira, 2005, Powerful CEOs and their impact on corporate performance, Review of Financial Studies 18, 1403-1432.
3. Adams, Renée, and Daniel Ferreira, 2007, A theory of friendly boards, Journal of Finance 62, 217-250.
4. Anderson, Ronald, and David Reeb, 2003, Founding-family ownership and firm performance: Evidence from the S&P 500, Journal of Finance 58, 1301-1328.
5. Ang, James, Rebel Cole, and James Lin, 2000, Agency costs and ownership structure, Journal of Finance, 55, 81-106.
6. Barber, Brad, and John Lyon, 1996, Detecting abnormal operating performance: The empirical power and specification of test statistics, Journal of Financial Economics 41, 359-399.
7. Bebchuk, Lucian, Alma Cohen, and Allen Ferrell, 2009, What matters in corporate governance Review of Financial Studies, 22, 783-827.
8. Bebchuk, Lucian, and Jesse Fried, 2003, Executive compensation as an agency problem, Journal of Economic Perspectives 17, 71-92.
9. Boone, Audra, Laura Field, Jonathan Karpoff, and Charu Raheja, 2007, The determinants of corporate board size and composition: An empirical analysis, Journal of Financial Economics, 85, 66-101.
10. Brickley, James, James Linck, and Jeffrey Coles, 1999, What happens to CEOs after they retire? New evidence on career concerns, horizon problems, and CEO incentives, Journal of Financial Economics 52, 341-377.
11. Burns, Natasha, and Simi Kedia, 2006, The impact of performance-based compensation on misreporting, Journal of Financial Economics 79, 35-67.
12. Chhaochharia, Vidhi, Yaniv Grinstein, Gustavo Grullon, and Roni Michaely, 2009, Product market competition and agency conflicts: Evidence from the Sarbanes Oxley Act, Working paper, University of Miami.
13. Coles, Jeffrey, Naveen Daniel, and Lalitha Naveen, 2008, Boards: Does one size fit all Journal of Financial Economics 87, 329-356.
14. Core, John, Robert Holthausen, and David Larcker, 1999, Corporate governance, chief executive officer compensation, and firm performance, Journal of Financial Economics 51, 371-406.
15. Denis, David, and Atulya Sarin, 1999, Ownership and board structures in publicly traded corporations, Journal of Financial Economics 52, 187-223.
16. Duchin, Ran, John Matsusaka, and Oguzhan Ozbas, 2010, When are outside directors effective?Journal of Financial Economics 96, 195-214.
17. Fama, Eugene, 1980, Agency problems and the theory of the firm, Journal of Political Economy 88, 288-307.
18. Fama, Eugene, and Michael Jensen, 1983, Separation of ownership and control, Journal of Law and Economics 26, 301-325.
19. Fee, C. Edward, and Charles Hadlock, 2004, Management turnover across the corporate hierarchy, Journal of Accounting and Economics 37, 3-38.
20. Fich, Eliezer, 2005, Are some outside directors better than others? Evidence from director appointments byFortune 1000 firms, Journal of Business 78, 1943-1972.
21. Fich, Eliezer, and Anil Shivdasani, 2006, Are busy boards effective monitors Journal of Finance 61, 689-724.
22. Fich, Eliezer, and Anil Shivdasani, 2007, Financial fraud, director reputation, and shareholder wealth, Journal of Financial Economics 86, 306-336.
23. Gilson, Stuart, 1990, Bankruptcy, boards, banks, and block holders: Evidence on changes in corporate governance when firms default, Journal of Financial Economics 27, 355-387.
24. Gompers, Paul, Joy Ishii, and Andrew Metrick, 2003, Corporate governance and equity prices, Quarterly Journal of Economics 118, 107-155.
25. Hallock, Kevin, 1997, Reciprocally interlocking boards of directors and executive compensation, Journal of Financial and Quantitative Analysis 32, 331-344.
26. Harford, Jarrad, Sattar Mansi, and William Maxwell, 2008, Corporate governance and firm cash holdings in the U.S., Journal of Financial Economics 87, 535-555.
27. Harris, Milton, and Artur Raviv, 2008, A theory of board control and size, Review of Financial Studies 21, 1797-1832.
28. Heckman, James, 1979, Sample selection bias as a specification error, Econometrica 47, 153-161.
29. Helmich, Donald, 1974, Organizational growth and succession patterns, Academy of Management Journal 17, 771-775.
30. Helmich, Donald, and Warren Brown, 1972, Successor type and organizational change in the corporate enterprise, Administrative Science Quarterly 17, 371-381.
31. Hennes, Karen, Andrew Leone, and Brian Miller, 2008, The importance of distinguishing errors from irregularities in restatement research: The case of restatements and CEO/CFO turnover, The Accounting Review 83, 1487-1519.
32. Hermalin, Benjamin, and Michael Weisbach, 1988, The determinants of board composition, RAND Journal of Economics 19, 589-606.
33. Hermalin, Benjamin, and Michael Weisbach, 1998, Endogenously chosen board of directors and their monitoring of the CEO, American Economic Review 88, 96-118.
34. Hermalin, Benjamin, and Michael Weisbach, 2003, Boards of directors as an endogenously determined institution: A survey of the economic literature, Federal Reserve Bank of New York Economic Policy Review Issue Apr, 7-26.
35. Jensen, Michael, and William Meckling, 1976, Theory of the firm: Managerial behavior, agency costs and ownership structure, Journal of Financial Economics 3, 305-360.
36. Kaplan, Steven, and David Reishus, 1990, Outside directorships and corporate performance, Journal of Financial Economics 27, 389-410.
37. Kaufman, Allen, Ernie Englander, and Christopher Tucci, 2007, The managerial power thesis revised: Independent directors and the CEO "directorate", Working paper, University of New Hampshire.
38. Klein, April, 1998, Firm performance and board committee structure, Journal of Law and Economics 41, 275-303.
39. Larcker, David, Scott Richardson, Andrew Seary, and Irem Tuna, 2005, Back door links between directors and executive compensation, Working paper, Stanford University.
40. Li, Kai, and Nagpurnanand Prabhala, 2007, Self-selection models in corporate finance, in Handbook of Corporate Finance: Empirical Corporate Finance, Handbooks in Finance Series (Elsevier: North-Holland).
41. Linck, James, Jeffry Netter, and Tina Yang, 2008, The determinants of board structure, Journal of Financial Economics 87, 308-328.
42. Linck, James, Jeffry Netter, and Tina Yang, 2009, The effects and unintended consequences of the Sarbanes-Oxley Act on the supply and demand for directors, Review of Financial Studies 22, 3287-3328.
43. Mace, Myles, 1971, Directors: Myth and reality, ( Boston: Harvard Business School Press).
44. Masulis, Ronald, Cong Wang, and Fei Xie, 2007, Corporate governance and acquirer returns, Journal of Finance 62, 1851-1889.
45. Masulis, Ronald, Cong Wang, and Fei Xie, 2010, Globalizing the boardroom: The effects of foreign directors on corporate governance and firm performance, Working paper, Vanderbilt University.
46. Mikkelson, Wayne, and Megan Partch, 2003, Do persistent large cash reserves hinder performance Journal of Finance and Quantitative Analysis 38, 275-294.
47. Mobbs, Shawn, 2010, CEOs under fire: The effects of competition on CEO compensation and turnover, Working paper, University of Alabama.
48. Myers, Stewart, and Nicholas Majluf, 1984, Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics 13, 187-221.
49. Opler, Tim, Lee Pinkowitz, René Stulz, and Rohan Williamson, 1999, The determinants and implications of corporate cash holdings, Journal of Financial Economics 52, 3-46.
50. Perry, Tod, and Urs Peyer, 2005, Board seat accumulation by executives: A shareholder's perspective, Journal of Finance 60, 2083-2123.
51. Raheja, Charu, 2005, Determinants of board size and composition: A theory of corporate boards, Journal of Financial and Quantitative Analysis 40, 283-306.
52. Shivdasani, Anil, and David Yermack, 1999, CEO involvement in the selection of new board members: An empirical analysis, Journal of Finance 54, 1829-1853.
53. Srinivasan, Suraj, 2005, Consequences of financial reporting failure for outside directors: Evidence from accounting restatements and audit committee members, Journal of Accounting Research 43, 291-334.
54. Stulz, René, 1990, Managerial discretion and optimal financing policies, Journal of Financial Economics 26, 3-27.
55. White, Halbert, 1980, A heteroskedasticity-consistent covariance matrix estimator and a direct test of heteroskedasticity, Econometrica 48, 817-838.
56. Yermack, David, 2004, Remuneration, retention, and reputation incentives for outside directors, Journal of Finance 59, 2281-2308.