Premium
Professors in the Boardroom and Their Impact on Corporate Governance and Firm Performance
Author(s) -
Francis Bill,
Hasan Iftekhar,
Wu Qiang
Publication year - 2015
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/fima.12069
Subject(s) - chief executive officer , corporate governance , accounting , accrual , business , executive compensation , officer , compensation (psychology) , stock price , stock (firearms) , management , finance , economics , political science , psychology , mechanical engineering , paleontology , earnings , series (stratigraphy) , psychoanalysis , law , biology , engineering
We find that companies with directors from academia are associated with higher performance. This relation is driven by professors without administrative positions. We also find that academic directors play an important governance role through their advising and monitoring functions. Specifically, our results show that the presence of academic directors is associated with greater acquisition performance, a higher number of patents and citations, higher stock price informativeness, lower discretionary accruals, lower chief executive officer (CEO) compensation, and higher CEO forced turnover‐performance sensitivity. Overall, our results indicate that academic directors are valuable advisors and effective monitors and firms benefit from having academic directors.