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Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments

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  • Stephen P. Ferris

    (College of Business, University of Missouri-Columbia)

  • Murali Jagannathan

    (School of Management, Binghamton University-SUNY)

  • A. C. Pritchard

    (Law School, University of Michigan)

Abstract

We examine the number of external appointments held by corporate directors. Directors who serve larger firms and sit on larger boards are more likely to attract directorships. Consistent with Fama and Jensen (1983), we find that firm performance has a positive effect on the number of appointments held by a director. We find no evidence that multiple directors shirk their responsibilities to serve on board committees. We do not find that multiple directors are associated with a greater likelihood of securities fraud litigation. We conclude that the evidence does not support calls for limits on directorships held by an individual. Copyright 2003 by the American Finance Association.

Suggested Citation

  • Stephen P. Ferris & Murali Jagannathan & A. C. Pritchard, 2003. "Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments," Journal of Finance, American Finance Association, vol. 58(3), pages 1087-1112, June.
  • Handle: RePEc:bla:jfinan:v:58:y:2003:i:3:p:1087-1112
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