EconPapers    
Economics at your fingertips  
 

Does Skin in the Game Matter? Director Incentives and Governance in the Mutual Fund Industry

Martijn Cremers, Joost Driessen (), Pascal Maenhout and David Weinbaum

Journal of Financial and Quantitative Analysis, 2009, vol. 44, issue 6, 1345-1373

Abstract: We use a unique database on ownership stakes of equity mutual fund directors to analyze whether the directors’ 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 “skin in the game,†significantly underperform. We posit two economic mechanisms to explain this relation. First, lack of ownership could indicate a director’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.

Date: 2009
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)

Related works:
Working Paper: Does Skin in the Game Matter? Director Incentives and Governance in the Mutual Fund Industry (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

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 ().

 
Page updated 2020-11-25
Handle: RePEc:cup:jfinqa:v:44:y:2009:i:06:p:1345-1373_99