The Importance of Network Recommendations in the Director Labor Market

Ruediger Fahlenbrach, Hyemin Kim and Angie Low
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Hyemin Kim: Nanyang Technological University
Angie Low: Nanyang Technological University

No 18-28, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Directors are more likely to obtain additional directorships or be promoted if the CEO and peer directors of their current board are well-connected. The impact of CEO and peer director connections is stronger for additional appointments and promotions at firms in the CEO’s and peer directors’ networks. CEO connections are particularly important for directors with a weaker labor market. There is no evidence that the appointments of referred directors are less well-received by the market than other appointments. Overall, connections are important in the director labor market. Access to additional networks provides strong incentives for directors to join corporate boards.

Keywords: board of directors; social connections; director labor market (search for similar items in EconPapers)
JEL-codes: G30 G34 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2018-03, Revised 2018-04
New Economics Papers: this item is included in nep-bec, nep-hrm and nep-soc
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1828

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