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Medientyp:
E-Artikel
Titel:
Director attention and firm value
Beteiligte:
Renjie, Rex Wang;
Verwijmeren, Patrick
Erschienen:
Wiley, 2020
Erschienen in:Financial Management
Sprache:
Englisch
DOI:
10.1111/fima.12259
ISSN:
0046-3892;
1755-053X
Entstehung:
Anmerkungen:
Beschreibung:
<jats:title>Abstract</jats:title><jats:p>In this article, we show that exogenous director distraction affects board monitoring intensity and leads to a higher level of inactivity by management. We construct a firm‐level director “distraction” measure by exploiting shocks to unrelated industries in which directors have additional directorships. Directors attend significantly fewer board meetings when they are distracted. Firms with distracted board members tend to be inactive and experience a significant decline in firm value. Overall, this article highlights the impact of limited director attention on the effectiveness of corporate governance and the importance of directors in keeping management active.</jats:p>