The effect of multiple directorships on a board of directors' corporate governance effectiveness

Clements, Curtis; Neill, John D.; Wertheim, Paul

doi:10.1504/ijcg.2013.055757

Cited by 5 publications

(40 citation statements)

References 22 publications

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Section: More Recent Researchmentioning

confidence: 53%

“…However, this article extends the previous work of Clements et al (2013Clements et al ( , 2014 in the following ways. First, Clements et al (2013) simply examine the number of outside board memberships held by each director and their statistical analysis includes only the size of the firm in question. In the current study, we extend the examination of factors which might increase governance effectiveness by examining the size of the outside companies on which the board member serves, and we use the relative size of the outside company as one proxy for the The impact of company size and multiple directorships on corporate governance effectiveness level of knowledge and experience that can be gained from service on that company's board.…”

Section: More Recent Researchmentioning

confidence: 53%

“…The reasoning behind this hypothesis is that directors of small companies would not typically be appointed to the boards of large, more complex organizations where more beneficial experience effects might occur. Clements et al (2013) provide empirical support for this hypothesis. Additionally, they hypothesize that the experience effect will dominate the busyness effect for directors of large firms.…”

Section: More Recent Researchmentioning

confidence: 63%

“…For example, Clements et al (2013) hypothesize that the busyness effect will dominate the experience effect for directors of small companies. In other words, for directors of small companies, the time constraints and/or distractions caused by an additional board appointment are predicted to outweigh any experience benefits gained by the increased level of board service.…”

Section: More Recent Researchmentioning

confidence: 99%

See 3 more Smart Citations

The impact of company size and multiple directorships on corporate governance effectiveness

Clements¹,

Neill²,

Wertheim

2015

Int J Discl Gov

Self Cite

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Section: More Recent Researchmentioning

confidence: 53%

Section: More Recent Researchmentioning

confidence: 53%

Section: More Recent Researchmentioning

confidence: 63%

Section: More Recent Researchmentioning

confidence: 99%

See 2 more Smart Citations

The impact of company size and multiple directorships on corporate governance effectiveness

Clements¹,

Neill²,

Wertheim

2015

Int J Discl Gov

Self Cite

View full text Add to dashboard Cite

“…They document a positive association between firm valuation and multiple directorships for firms with high advising and high external financing needs. In a similar vein, Clements et al (2013) postulate that the busyness effect will dominate the experience effect for directors of small companies. They predict that for small company directors, the distractions and/or time constraints caused by additional board appointments will outweigh any experience benefits gained by the additional directorships.…”

Section: Recent Researchmentioning

confidence: 99%

Multiple directorships, industry relatedness, and corporate governance effectiveness

Clements

Neill

Wertheim

2015

Corporate Governance

Self Cite

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Purpose – The purpose of this paper is to investigate the relationship between the industry relatedness of directors’ multiple directorships and corporate governance effectiveness. The authors posit that a director gains “beneficial experience” by serving on outside boards of companies in related industries, with a resulting increase in governance effectiveness. Conversely, they predict a decrease in governance effectiveness when directors serve on outside boards of companies in unrelated industries. Design/methodology/approach – Using publicly available data, a Tobit regression model is used to examine the effect of the industry relatedness of board members’ multiple directorships on corporate governance effectiveness. Findings – The results demonstrate a significant positive correlation between the industry relatedness of directors’ multiple directorships and corporate governance effectiveness. It was found that this industry relatedness effect is stronger for directors of small companies than large company directors. The paper also documents a significant negative effect on governance effectiveness for small firms whose directors increase their board service on non-industry-related boards. Originality/value – Prior research has examined the “Busyness Hypothesis” and the “Experience Hypothesis” as mutually exclusive hypotheses. This paper extends prior research by examining the possibility that the two hypotheses are not competing, but rather that both an experience effect and a busyness effect may be present for directors serving on multiple boards, and that one of the effects will dominate the other, based on certain company-specific characteristics.

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Multiple directorships and dividends in Spanish listed firms

Aguiar-Díaz,

Díaz-Díaz,

Ruiz-Mallorquí

2024

Borsa Istanbul Review

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The effect of multiple directorships on a board of directors' corporate governance effectiveness

Cited by 5 publications

References 22 publications

The impact of company size and multiple directorships on corporate governance effectiveness

The impact of company size and multiple directorships on corporate governance effectiveness

Multiple directorships, industry relatedness, and corporate governance effectiveness

Multiple directorships and dividends in Spanish listed firms

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