Does Skin in the Game Matter? Director Incentives and Governance in the Mutual Fund Industry
Joost Driessen (),
Pascal Maenhout and
Journal of Financial and Quantitative Analysis, 2009, vol. 44, issue 6, 1345-1373
We use a unique database on ownership stakes of equity mutual fund directors to analyze whether the directorsâ€™ incentive structure is related to fund performance. Ownership of both independent and nonindependent directors plays an economically and statistically significant role. Funds in which directors have low ownership, or â€œskin in the game,â€ significantly underperform. We posit two economic mechanisms to explain this relation. First, lack of ownership could indicate a directorâ€™s lack of alignment with fund shareholder interests. Second, directors may have superior private information on future performance. We find evidence in support of the first and against the second mechanism.
References: Add references at CitEc
Citations: View citations in EconPapers (27) Track citations by RSS feed
Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)
Working Paper: Does Skin in the Game Matter? Director Incentives and Governance in the Mutual Fund Industry (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cup:jfinqa:v:44:y:2009:i:06:p:1345-1373_99
Access Statistics for this article
More articles in Journal of Financial and Quantitative Analysis from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Keith Waters ().