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Journal of Financial and Quantitative Analysis Vol. 60 No. 1 2025

Directors: Older and Wiser, or Too Old to Govern?

Ronald W. Masulis1; Cong Wang2; Fei Xie3; Shuran Zhang4

1 University of New South Wales ABFER and ECGI · 2 The Chinese University of Hong Kong · 3 University of Delaware and ECGI · 4 Hong Kong Polytechnic University Faculty of Business School of Accounting and Finance

Abstract

An unintended consequence of recent governance reforms in the United States is firms’ greater reliance on older director candidates, resulting in noticeable board aging. We investigate this phenomenon’s implications for corporate governance. We document that older independent directors exhibit poorer board meeting attendance, are less likely to serve on or chair key board committees, and receive less shareholder support in annual elections. These directors are associated with weaker board oversight in acquisitions, CEO turnovers, executive compensation, and financial reporting. However, they can also provide particularly valuable advice when they have specialized experience or when firms have greater advisory needs.

DOI
10.1017/s0022109023001151
Volume
60
Issue
1
Pages
169-208
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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