Performance effects of appointing other firms' executive directors

Charlie Weir, Oleksandr Talavera () and Alexander Muravyev
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Charlie Weir: Aberdeen Business School
Alexander Muravyev: IZA and St. Petersburg University GSOM
Authors registered in the RePEc Author Service: Александр Муравьев

No 2011_12, Department of Economics Working Papers from Durham University, Department of Economics

Abstract: This paper studies the relationship between directors’ human capital and the company’s performance. In particular, we focus on the effect on performance of non-executive directors who are also executive directors in other firms. We find a positive relationship between the presence of these non-executive directors and the accounting performance of the appointing company. The effect is stronger if these directors are also executive directors at companies that are performing well. Additionally, the similarity of industry plays a role. The results support the view that appointing firms benefit from the human capital of the appointee.

Keywords: human capital; executive directors; non-executive directors; company performance (search for similar items in EconPapers)
JEL-codes: G34 G39 (search for similar items in EconPapers)
Date: 2011-10-01
New Economics Papers: this item is included in nep-bec, nep-eff, nep-hrm and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:dur:durham:2011_12

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