Journal
JOURNAL OF FINANCIAL ECONOMICS
Volume 98, Issue 3, Pages 550-567Publisher
ELSEVIER SCIENCE SA
DOI: 10.1016/j.jfineco.2010.07.004
Keywords
Independent director; Sudden death; Board of directors; Corporate governance; Firm value
Categories
Ask authors/readers for more resources
We investigate contributions of independent directors to shareholder value by examining stock price reactions to sudden deaths in the US from 1994 to 2007. We find, first, that following director death stock prices drop by 0.85% on average. Second, the degree of independence and board structure determine the marginal value of independent directors. Third, independence is more valuable in crucial board functions. Finally, controlling for director-invariant heterogeneity using a fixed effect approach, we identify the value of independence over and above the value of individual skills and competences. Overall, our results suggest that independent directors provide a valuable service to shareholders. (C) 2010 Published by Elsevier B.V.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available