Work

CEO Involvement in the Selection of New Board Members: An Empirical Analysis

Year: 1999

Type: article

Abstract: We study whether CEO involvement in the selection of new directors influences the nature of appointments to the board. When the CEO serves on the nominating committee or no nominating committee exists, firms appoint fewer independent outside directors and more gray outsiders with conflicts of interest. Stock price reactions to independent director appointments are significantly lower when the CEO is involved in director selection. Our evidence may illuminate a mechanism used by CEOs to reduce pressure from active monitoring, and we find a recent trend of companies removing CEOs from involvement in director selection.

Source: The Journal of Finance

DOI: 10.1111/0022-1082.00168

Authors: Anil Shivdasani, David Yermack

Institutions: University of North Carolina at Chapel Hill, New York University

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3122991787

FWCI: 25.85

Cites: 30

Cited by: 1,354

Related to: 10