Is Busy Really Busy? Board Governance Revisited

Christian Andres; Inga van den Bongard; Mirco Lehmann

doi:10.1111/jbfa.12051

journal article Nov 01, 2013

Is Busy Really Busy? Board Governance Revisited

Christian Andres

Inga van den Bongard Mirco Lehmann

Journal of Business Finance & Accounting Vol. 40 No. 9-10 pp. 1221-1246 · Wiley

View at Publisher Save 10.1111/jbfa.12051

Abstract

AbstractWe investigate the relationship between firm governance and the board's position in the social network of directors. Using a sample of 133 German firms over the four‐year period from 2003 to 2006, we find that firms with intensely connected supervisory boards are (1) associated with lower firm performance, and (2) pay their executives significantly more. We interpret these results as evidence of poor monitoring in firms with directors who are more embedded in the social network. In both cases, simple measures for busy directors that were used by other studies in the past fail to show any significant pattern. The findings suggest that the quality and structural position of additional board seats may play a bigger role than simply the number of board appointments.

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Details

Published: Nov 01, 2013
Vol/Issue: 40(9-10)
Pages: 1221-1246
License: View

Authors

Cite This Article

Christian Andres, Inga van den Bongard, Mirco Lehmann (2013). Is Busy Really Busy? Board Governance Revisited. Journal of Business Finance & Accounting, 40(9-10), 1221-1246. https://doi.org/10.1111/jbfa.12051

Is Busy Really Busy? Board Governance Revisited

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