What matters more in board independence? Form or substance: Evidence from influential CEO-directors

B-Tier
Journal: Journal of Corporate Finance
Year: 2021
Volume: 71
Issue: C

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We exploit heterogeneities among CEO-directors and find that influential CEO-directors (ICDs) provide value through advising and monitoring. To expansively capture their relative influence, we identify CEO-directors who command more pay than the appointing firm's CEO. We find ICDs are more (less) likely to serve on the compensation (audit) committee. ICDs serve on more board seats and benefit more by serving on these seats. ICDs improve the performance of their appointing firm by increasing CEO pay-performance sensitivities and by helping with R&D and M&A activities. Alternatively, uninfluential CEO-directors are largely inconsequential or even detrimental to the appointing firm.

Technical Details

RePEc Handle
repec:eee:corfin:v:71:y:2021:i:c:s0929119921002212
Journal Field
Finance
Author Count
2
Added to Database
2026-01-26