Board characteristics and firm resilience: Evidence from disruptive events

IF 4.6 3区管理学 Q1 BUSINESS Corporate Governance-An International Review Pub Date : 2023-03-20 DOI:10.1111/corg.12518

Ettore Croci, Gerard Hertig, Layla Khoja, Luh Luh Lan

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Abstract

Research Question/Issue

We study the contribution of board characteristics such as independence, size, busyness, and CEO duality, to firm resilience at times of firm-specific crises.

Research Findings/Insights

Based on manually collected US data, we document that board-related variables affect the short-term market reactions around disruptive events. Board independence exacerbates the negative share price effect, whereas the converse is true for director busyness and board size. However, the negative impact of board independence is attenuated in complex firms. We do not find that CEO duality affects market reactions. By contrast, in the long run, we do not observe stable and significant relationships between board-related variables and firm performance with the exception of a negative impact of board independence.

Theoretical/Academic Implications

Our paper contributes to different strands of the literature. First, it contributes to the literature on the effects of board characteristics by showing how they affect stock price reactions at the time of firm-specific crises. Second, our results on board attributes provide a new take on the two monitoring and advisory functions of the board. Third, we add to the literature that measures the value of directors. More generally, the paper contributes to the literature on the role of corporate governance, and in particular the board of directors, in crises situations.

Practitioner/Policy Implications

We show that three board-related attributes affect market reactions at the time of a firm-specific shock. Board independence exacerbates the negative share price effect of disruptive events, whereas the reverse is true for director busyness and board size. These reactions imply that, in times of crisis, advice-oriented boards fare better than monitoring-oriented boards. More specifically, information flows less easily within independent boards. In addition, busy directors and large boards are more talented, respectively more effective in complex situations. However, these results do not hold for industry-wide shocks.

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董事会特征与公司弹性:来自破坏性事件的证据

研究问题/议题我们研究了独立性、规模、繁忙程度和首席执行官双重性等董事会特征在公司特定危机发生时对公司复原力的影响。研究结果/见解基于人工收集的美国数据，我们发现董事会相关变量会影响破坏性事件发生时的短期市场反应。董事会的独立性会加剧股价的负面影响，而董事的忙碌程度和董事会规模则相反。然而，董事会独立性的负面影响在复杂企业中有所减弱。我们没有发现 CEO 双重性会影响市场反应。相比之下，从长期来看，除了董事会独立性的负面影响之外，我们没有观察到董事会相关变量与公司业绩之间存在稳定而显著的关系。理论/学术意义我们的论文对不同领域的文献有所贡献。首先，本文通过展示董事会特征如何影响公司特定危机发生时的股价反应，为有关董事会特征影响的文献做出了贡献。其次，我们关于董事会属性的研究结果为董事会的两种监督和咨询职能提供了新的视角。第三，我们为衡量董事价值的文献增添了新的内容。更广泛地说，本文为有关公司治理，尤其是董事会在危机情况下的作用的文献做出了贡献。实践者/政策含义我们的研究表明，与董事会相关的三个属性会在公司受到特定冲击时影响市场反应。董事会的独立性会加剧破坏性事件对股价的负面影响，而董事的忙碌程度和董事会规模则相反。这些反应意味着，在危机时期，以建议为导向的董事会比以监督为导向的董事会表现更好。更具体地说，信息在独立董事会中更不容易流动。此外，在复杂的情况下，忙碌的董事和大型董事会分别更有才能，也更有效。然而，这些结果对于整个行业的冲击并不成立。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.

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