JOURNAL OF ACCOUNTING AND FINANCE
An International Study of the Value Implications of CEO External-Directorships
Author(s): Jesus M. Salas, Andrey Zagorchev
Citation: Jesus M. Salas, Andrey Zagorchev, (2018) "An International Study of the Value Implications of CEO External-Directorships", Journal of Accounting and Finance, Vol. 18, ss. 5, pp. 175-194
Article Type: Research paper
Publisher: North American Business Press
Abstract:
We study the effect of CEO external-directorships on performance using non-US firms. We find that
CEOs serving on four or more external-directorships have a detrimental effect on firm value and
performance and more powerful CEOs are busier. Firms with busy CEOs trade at a 10% discount
relative to the mean and their ROAs suffer 28% relative to the mean, suggesting economic significance. Our results are robust to matching and instrumental variable regressions that control for endogeneity. The evidence suggests that shareholders in countries with poor democracy, higher bureaucracy, and higher corruption should find ways to discourage excessive external-directorships of CEOs.