Is prior director experience valuable?

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

19 Scopus Citations
View graph of relations

Author(s)

  • Stephen Gray
  • John Nowland

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)643-666
Journal / PublicationAccounting and Finance
Volume53
Issue number3
Publication statusPublished - Sep 2013

Abstract

Previous studies have investigated the effectiveness of directors in performing their monitoring and advising functions by examining characteristics such as independence, qualifications and professional expertise. In this study, we propose a more direct measure of director effectiveness - prior experience as a director. Using hand-collected data from Australia, we find that both the depth (number of prior years) and breadth (number of current directorships) of a new appointee's director experience is valued by shareholders at appointment. In particular, the market reaction is highest for appointees with the most prior director experience (two or more other current directorships in listed companies and four or more years of director experience) and when experienced appointees join less-experienced boards. © 2012 The Authors.

Research Area(s)

  • Board of directors, Director appointments, Director experience

Citation Format(s)

Is prior director experience valuable? / Gray, Stephen; Nowland, John.

In: Accounting and Finance, Vol. 53, No. 3, 09.2013, p. 643-666.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review