Globalizing the boardroom—The effects of foreign directors on corporate governance and firm performance
Ronald Masulis,
Cong Wang and
Fei Xie
Journal of Accounting and Economics, 2012, vol. 53, issue 3, 527-554
Abstract:
We examine the benefits and costs associated with foreign independent directors (FIDs) at U.S. corporations. We find that firms with FIDs make better cross-border acquisitions when the targets are from the home regions of FIDs. However, FIDs also display poor board meeting attendance records and are associated with a greater likelihood of intentional financial misreporting, higher CEO compensation, and a lower sensitivity of CEO turnover to performance. Finally, firms with FIDs exhibit significantly poorer performance, especially as their business presence in the FID's home region becomes less important.
Keywords: Foreign directors; Board meeting attendance; Earnings restatement; Cross-border acquisition; CEO compensation; CEO turnover; Firm performance (search for similar items in EconPapers)
JEL-codes: G32 G34 M41 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (257)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:53:y:2012:i:3:p:527-554
DOI: 10.1016/j.jacceco.2011.12.003
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