Browsing by Subject "Board of directors"
Now showing 1 - 2 of 2
Results Per Page
Sort Options
Item Board classification and shareholder value : evidence from corporate law amendments(2016-05) Kim, Daehyun; Clement, Michael B.; Caskey, Judson A; Freeman, Robert N; Jennings, Ross G; Starks, Laura TThis study examines the shareholder value impact of board classification. A classified board typically consists of three classes of directors who serve staggered three-year terms; by contrast, directors of a declassified board are elected annually. Prior studies find a negative correlation between classified boards and shareholder value, but do not establish causality. This study contributes direct and causal evidence using a natural experiment based on corporate law amendments that impose a board classification change. The market reaction surrounding legislative events identifies a perceived shareholder value change caused by the prospect of an exogenous shift in board classification. The results suggest that the market perceives classified boards as reducing shareholder value and declassified boards as improving it. This evidence is consistent with shareholder activists’ argument that board declassification benefits shareholders.Item Two Essays on Corporate Boards(2011-08) Jun, Chulhee; Gillan, Stuart; Cashman, George; Whitby, Ryan; Lin, ZhangxiConsiderable research examines how board characteristics impact firm performance (e.g., Tobin’s Q). Besides board size and board independence, recent work has introduced numerous new board characteristics to the literature. These include, for example, the number of external directorships held by directors, the presence of interlocked directors, the connectedness of the board, and the presence of foreign directors, female directors, and older directors amongst others. However, few studies have examined a comprehensive set of these characteristics. As such we do not know how these different characteristics relate to each other and which are important in explaining firm performance. This paper examines a comprehensive set of board characteristics, documenting how the characteristics relate to each other and using bootstrap analysis and extreme bounds analysis (EBA) to examine how these characteristics are associated with firm value as measured by Tobin’s Q. In doing so, I shed light on which board characteristics really matter. In addition, I use principal components analysis to examine what factors characterize the dimensionality of board structure. Based on the results in this study, I claim that board size, age, family directors, foreign directors, and insider with outside directorships should be considered in the study of corporate boards.