Does the academic profession really matter in board monitoring? Evidence from individual director voting

Xinni Cai, Ge Yang and Xiaojia Zheng

Applied Economics, 2024, vol. 56, issue 13, 1564-1580

Abstract: This study examines the voting behaviour of independent directors from academia based on manually collected voting data. We find that academic independent directors are less likely to dissent on board proposals than other independent directors, especially the directors who have fewer industry-specific experiences or have a relatively higher pay from the focal firm. The academic directors are also more likely to lose board seats after dissension, consistent with their concern of less job security as they are easily replaced. Lastly, although academic directors generally have weaker incentives to vote against insiders, they are more likely to dissent on proposals concerning related-party transactions. Overall, our study sheds new light on the role of academic independent directors in board monitoring effectiveness.

Date: 2024
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DOI: 10.1080/00036846.2023.2176459

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