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The value of director reputation: Evidence from outside director appointments

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  • Gogolin, Fabian
  • Cummins, Mark
  • Dowling, Michael

Abstract

This study examines the role of director reputation using a sample of outside director appointments. Relative to existing literature, we focus on outside director appointments involving CEO award winners. Exploiting the award-induced change in a director’s reputation, we are able to show that investors react more positively to the appointment of outside directors they perceive as more reputable. We find that this ’reputation premium’ is approximately 2%, and robust across a range of subtests that control for a wide range of possibly confounding influences.

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  • Gogolin, Fabian & Cummins, Mark & Dowling, Michael, 2018. "The value of director reputation: Evidence from outside director appointments," Finance Research Letters, Elsevier, vol. 27(C), pages 266-272.
    • Handle: RePEc:eee:finlet:v:27:y:2018:i:c:p:266-272
    DOI: 10.1016/j.frl.2018.03.012
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    References listed on IDEAS

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    More about this item

    Keywords

    Director reputation; Director appointment; Announcement returns;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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