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Journal of Finance Vol. 58 No. 3 2003

Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments

Stephen P. Ferris1,2,3,4,5; Murali Jagannathan1,2,3,4,5; Adam C. Pritchard1,2,3,4,5

1 Binghamton University · 2 Vanderbilt University · 3 University of Michigan–Ann Arbor · 4 Institute of Semitic Studies · 5 University of Missouri

Abstract

We examine the number of external appointments held by corporate directors. Directors who serve larger firms and sit on larger boards are more likely to attract directorships. Consistent with Fama and Jensen (1983), we find that firm performance has a positive effect on the number of appointments held by a director. We find no evidence that multiple directors shirk their responsibilities to serve on board committees. We do not find that multiple directors are associated with a greater likelihood of securities fraud litigation. We conclude that the evidence does not support calls for limits on directorships held by an individual.

DOI
10.1111/1540-6261.00559
Volume
58
Issue
3
Pages
1087-1111
Language
en
Sources
crossref openalex bibtex:phds-export.bib

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