Can Non-CEO Inside Directors Add Value? Evidence From Unplanned CEO Turnovers

2018 ◽  
Author(s):  
Laurie Krigman ◽  
Mia L. Rivolta
Keyword(s):  
Inside Directors

Chief Financial Officers as Inside Directors

2014 ◽  
Vol 31 (3) ◽  
pp. 787-817 ◽  
Author(s):  
Jean C. Bedard ◽  
Rani Hoitash ◽  
Udi Hoitash
Keyword(s):  
Chief Financial Officers ◽  
Inside Directors

Can non-CEO inside directors add value? Evidence from unplanned CEO turnovers

2019 ◽  
Vol 18 (3) ◽  
pp. 456-482
Author(s):  
Laurie Krigman ◽  
Mia L. Rivolta
Keyword(s):  
Succession Planning ◽  
Design Methodology ◽  
Leadership Transition ◽  
Data Set ◽  
Content Type ◽  
Matching Process ◽  
Inside Directors ◽  
Transfer Of Information ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to investigate the roles of non-CEO inside directors (NCIDs) in the new CEO-firm matching process using the context of unplanned CEO departures when immediate CEO succession planning becomes a sole board responsibility. Although critics argue that inside directors decrease the monitoring effectiveness of a board, inside directors arguably possess superior firm-specific experience and knowledge that can be beneficial during the leadership transition. Design/methodology/approach The authors use a comprehensive, manually collected data set of unplanned CEO departures from 1993 to 2012. Findings The authors find that NCIDs play an important role in the CEO transitioning process. They help firms identify qualified inside replacements and provide stability as the new permanent or interim CEO. In addition, NCIDs facilitate the transfer of information and help the new external CEOs succeed. They show that the longer the NCID stays with the company, the longer the tenure of the new CEO. They also document that the presence of NCIDs improves operating and stock performance; especially when the new CEO is hired from outside of the firm. Practical implications The impact of NCIDs is particularly important when the firm hires an outsider as the new CEO. These results suggest that board composition affects frictions in the CEO labor market. Originality/value The literature has predominantly focused on the downside of having inside directors. Too many inside directors on a firm’s board is often associated with ineffective boards and entrenchment. To the contrary, the authors focus on a potential benefit of having inside directors.

Characteristics of Women and Men Corporate Inside Directors in the US

2004 ◽  
Vol 12 (3) ◽  
pp. 337-342 ◽  
Author(s):  
Deborah Dahlen Zelechowski ◽  
Diana Bilimoria
Keyword(s):  
Inside Directors ◽  
The Us

Inside directors, risk aversion, and firm performance

2017 ◽  
Vol 32 ◽  
pp. 64-74
Author(s):  
Arun D. Upadhyay ◽  
Rahul Bhargava ◽  
Sheri Faircloth ◽  
Hongchao Zeng
Keyword(s):  
Firm Performance ◽  
Risk Aversion ◽  
Inside Directors

Director workloads, attendance and firm performance

2018 ◽  
Vol 31 (2) ◽  
pp. 214-231 ◽  
Author(s):  
Stephen Gray ◽  
John Nowland
Keyword(s):  
Firm Performance ◽  
Empirical Analysis ◽  
Design Methodology ◽  
Archival Data ◽  
Attendance Rates ◽  
Content Type ◽  
Inside Directors

Purpose This paper examines whether increased director workloads are benefiting firms or are causing directors to become too busy, resulting in lower director attendance and weaker firm performance. Design/methodology/approach This paper conducts empirical analysis of the relationships between meeting frequency, director attendance rates and firm performance using archival data from Australia. Findings Attendance rates for both outside and inside directors decrease as they are required to attend more meetings. The benefits firms obtain from holding additional meetings are significantly eroded by lower director attendance. Originality/value This study brings together the literatures on meeting frequency, director busyness and firm performance to show that increased director workloads are only beneficial to firms if directors do not become too busy to fulfill their obligations to shareholders.

scholarly journals Impact of gender and ethnic composition of South African boards of directors on intellectual capital performance

2006 ◽  
Vol 2 (1) ◽  
pp. 7-22 ◽  
Author(s):  
Mitchell Van der Zahn
Keyword(s):  
Firm Performance ◽  
South African ◽  
Intellectual Capital ◽  
Boards Of Directors ◽  
Positive Association ◽  
Positive Influence ◽  
Ethnic Composition ◽  
Inside Directors ◽  
Negative Effect ◽  
Using Data

This study examines the association between the gender and ethnic composition of boards of directors and firm performance in a transitional nation. In contrast to prior research that largely focuses on firm performance within a financial context, this study concentrates on intellectual capital performance. Using data collected from 84 South African, empirical results indicate a positive association between the percentage of female and non-white directors on the board and a firm’s intellectual capital performance. Additional analysis shows the designation of female directors as an insider has a negative effect of intellectual capital performance. Designation of female and non-white directors as outsiders, meanwhile, has a positive influence on a firm’s intellectual capital performance. Finally, there was no association between the percentage of non-white inside directors on the board and intellectual capital performance.

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