What’s happened over the past 10 years to the selection of retired CEOs as board members?
AbstractI analyze directorships held by CEOs who retired during 1989-1993 and during 1998-2002. My results suggest that retired CEOs became more popular on boards. Also, although pre-retirement accounting performance helps explain the number of outside directorships a retired CEO held in the 1989-1993 sample as Brickley, Linck, and Coles (1999) found, it does not in the 1998-2002 sample. Third, a company's stock performance during a CEO's tenure affects whether he became an inside director of that company after retirement. A 25% change in stock price performance increased the probability by 11% in the 1989-1993 sample, and 51% in the 1998-2002 sample. Finally, if a retired CEO worked in a regulated industry, his probability of serving at least one outside directorship fell by 34% in the 1989-1993 sample, and 24% in the 1998-2002 sample.
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Bibliographic InfoPaper provided by Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington in its series Caepr Working Papers with number 2007-007.
Length: 29 pages
Date of creation: May 2007
Date of revision:
Corporate governance; Board of director; Deregulation;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-AGE-2007-05-26 (Economics of Ageing)
- NEP-ALL-2007-05-26 (All new papers)
- NEP-BEC-2007-05-26 (Business Economics)
- NEP-HIS-2007-05-26 (Business, Economic & Financial History)
- NEP-REG-2007-05-26 (Regulation)
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- Lauren Cohen & Andrea Frazzini & Christopher Malloy, 2008. "Hiring Cheerleaders: Board Appointments of "Independent" Directors," NBER Working Papers 14232, National Bureau of Economic Research, Inc.
- Changmin Lee, 2007. "Where do the talented people work as outside directors?," Caepr Working Papers 2007-006, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
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