A NEW PERSPECTIVE ON DIRECTOR BUSYNESS

We provide a new perspective to the multiple directorships literature, which focuses on outside directors. Inside directors, however, are important in both the boardroom and day‐to‐day operations of the firm. We find that any negative effect of director busyness is more pervasive for inside directors than for outside directors. Additional analysis reveals that bidding firms' acquisition announcement returns are decreasing in inside director board appointments, but there is no such effect for outside directors. These results highlight the importance of inside directors and demonstrate that firm performance can be compromised when they sit on multiple boards.