Journal article

Authors list: Ewelt-Knauer, Corinna; Gerstel, Hannes; Khaled, Mohamed A.; Wöhrmann, Arnt

Publication year: 2024

Pages: 2282-2303

Journal: Managerial and Decision Economics

Volume number: 45

Issue number: 4

ISSN: 0143-6570

eISSN: 1099-1468

DOI Link: https://doi.org/10.1002/mde.4125

Publisher: Wiley

Abstract: 

Reputation, monetary, risk, and workload incentives affect independent directors' decisions to join new or leave existing board of directors' seats, impacting their directorship portfolios. Using a director's perspective and relative incentive proxies, we find that directors strategically relinquish less prestigious board seats to increase their reputation. Similarly, we hypothesize and find that accepting an additional board nomination is incentivized by a director's goal to achieve higher reputation growth. Lastly, by taking on a firm's perspective, we find a positive association between the board's aggregated portfolio reputation and risk propensity with firm performance and earnings management.

Harvard Citation style: Ewelt-Knauer, C., Gerstel, H., Khaled, M. and Wöhrmann, A. (2024) What motivates independent directors to join or leave boards? The interplay between director incentives, director decisions, and firm outcomes, Managerial and Decision Economics, 45(4), pp. 2282-2303. https://doi.org/10.1002/mde.4125

APA Citation style: Ewelt-Knauer, C., Gerstel, H., Khaled, M., & Wöhrmann, A. (2024). What motivates independent directors to join or leave boards? The interplay between director incentives, director decisions, and firm outcomes. Managerial and Decision Economics. 45(4), 2282-2303. https://doi.org/10.1002/mde.4125