CEO Involvement in the Selection of New Board Members: An Empirical Analysis

  title={CEO Involvement in the Selection of New Board Members: An Empirical Analysis},
  author={A. Shivdasani and D. Yermack},
  journal={Journal of Finance},
  • A. Shivdasani, D. Yermack
  • Published 1999
  • Business
  • Journal of Finance
  • We study whether CEO involvement in the selection of new directors influences the nature of appointments to the board. When the CEO serves on the nominating committee or no nominating committee exists, firms appoint fewer independent outside directors and more gray outsiders with conflicts of interest. Stock price reactions to independent director appointments are significantly lower when the CEO is involved in director selection. Our evidence may illuminate a mechanism used by CEOs to reduce… CONTINUE READING
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