A Model of the Supply of Executives for Outside Directorships

Conyon, Martin and Read, L (2006) A Model of the Supply of Executives for Outside Directorships. Journal of Corporate Finance, 12 (3). pp. 645-659. ISSN 0929-1199

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Why do firms allow their executives to accept outsidedirectorships? Are firms acting in the best interests of their shareholders by allowing them to do so? We develop a theoretical model where accepting an outsidedirectorship alters the CEO's effect on the value of the home firm. Our model illustrates that executives will choose to spend more time on external directorships than is optimal for the home firm. Our theoretical model is consistent with other recent empirical finance research on the effects of external directorships.

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Journal Article
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Journal of Corporate Finance
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26 Jun 2012 08:40
Last Modified:
21 Nov 2022 22:14