Director skill sets

Renee Adams, Ali C. Akyol and Patrick Verwijmeren

Journal of Financial Economics, 2018, vol. 130, issue 3, 641-662

Abstract: Directors are not one-dimensional. We characterize their skill sets by exploiting Regulation S-K's 2009 requirement that U.S. firms must disclose the experience, qualifications, attributes, or skills that led the nominating committee to choose an individual as a director. We then examine how skills cluster on and across boards. Factor analysis indicates that the main dimension along which boards vary is in the diversity of skills of their directors. We find that firm performance increases when director skill sets exhibit more commonality.

Keywords: Directors; Expertise; Board effectiveness; Regulation S-K; Diversity (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (48)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:130:y:2018:i:3:p:641-662

DOI: 10.1016/j.jfineco.2018.04.010

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