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Director skill sets

Author

Listed:
  • Adams, Renée B.
  • Akyol, Ali C.
  • Verwijmeren, Patrick

Abstract

Directors are not one-dimensional. We characterize their skill sets by exploiting Regulation S-K's 2009 requirement that U.S. firms must disclose the experience, qualifications, attributes, or skills that led the nominating committee to choose an individual as a director. We then examine how skills cluster on and across boards. Factor analysis indicates that the main dimension along which boards vary is in the diversity of skills of their directors. We find that firm performance increases when director skill sets exhibit more commonality.

Suggested Citation

  • Adams, Renée B. & Akyol, Ali C. & Verwijmeren, Patrick, 2018. "Director skill sets," Journal of Financial Economics, Elsevier, vol. 130(3), pages 641-662.
    • Handle: RePEc:eee:jfinec:v:130:y:2018:i:3:p:641-662
    DOI: 10.1016/j.jfineco.2018.04.010
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    References listed on IDEAS

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    More about this item

    Keywords

    Directors; Expertise; Board effectiveness; Regulation S-K; Diversity;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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