Outside directors, board independence, and shareholder wealth☆

  title={Outside directors, board independence, and shareholder wealth☆},
  author={S. Rosenstein and Jeffrey G. Wyatt},
  journal={Journal of Financial Economics},
  • S. Rosenstein, Jeffrey G. Wyatt
  • Published 1990
  • Business
  • Journal of Financial Economics
  • Abstract Management plays a dominant role in selecting outside directors, inviting skepticism about outsiders' ability to make independent judgments on firm performance. Our examination of wealth effects surrounding outside director appointments finds significantly positive share-price reactions. We find no clear evidence that outside directors of any particular occupation are more or less valuable than others. The results are consistent with the hypothesis that outside directors are chosen in… CONTINUE READING
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