 Benefit or burden? A comparison of CFO and CEO outside directorshipsSarfraz Khan and Elaine Mauldin Journal of Business Finance & Accounting, 2021, vol. 48, issue 7-8, 1175-1214 Abstract: We study the association between chief financial officer (CFO), compared to chief executive officer (CEO), outside board directorships and their home‐firm strategic investments, capital management, and overall performance. Using a sample of firms from 2003 to 2014, we find that only about 9% of CFOs, compared to about 24% of CEOs, sit on outside boards. We find robust evidence that CFO outside directorships are associated with fewer underinvestment problems, lower sensitivity between cash holdings and cash flows, and higher long‐term performance at their home firm, consistent with positive knowledge transfer by the CFO. On the other hand, we find little evidence of knowledge transfer for CEO outside board directorships, consistent with concerns that executives are too busy to hold outside directorships. Our findings support a need to recognize that outside directorships could provide benefits for some but not all executives. For CFOs, our findings support the argument that outside directorships provide CFOs an opportunity to network with and learn from other executives and directors, enabling these CFOs to improve practices in their home firm. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:48:y:2021:i:7-8:p:1175-1214 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker More articles in Journal of Business Finance & Accounting from Wiley Blackwell |
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