Sugar and Spice and Everything Nice: What Are Good Directors Made of?

Quoc-Anh Do (1) , Bang Dang Nguyen (2) , Raghavendra- University of Cambridge, Cambridge Judge Business School) Rau (3)

1 ECON - Département d'économie (Sciences Po)
2 CAM - University of Cambridge [UK]
3 Judge Business School

This paper analyzes the career paths followed by non-executive directors in a large sample of 40,585 unique directors associated with 5,246 unique US listed firms between 1999 and 2011. We document four types of characteristics that significantly influence the probability that a director will be successful in obtaining a second concurrent directorship. These include personal characteristics (belonging to large social networks, holding an MBA degree, having experience as a top executive in a large firm), macro economic indicators (obtaining the first directorship in a recession, or after the passing of the Sarbanes-Oxley act of 2002), firm characteristics and firm performance (holding a directorship in large firms, firms with better valuations, or firms with higher return volatility) and firm reputation (announcing accounting restatements or being hit by class-action suits). Our paper documents characteristics of successful non-executive directors and sheds light on the determinants of their career paths.

Keywords: Board of Directors; Corporate Governance; Career Concerns; Board Composition

Domains: Economics and Finance; Business administration; Sociology

Quoc-Anh Do, Bang Dang Nguyen, Raghavendra- University of Cambridge, Cambridge Judge Business School) Rau. Sugar and Spice and Everything Nice: What Are Good Directors Made of?. 2013. ⟨hal-03460924⟩