Why do firms appoint CEOs as outside directors

@article{Fahlenbrach2010WhyDF,
  title={Why do firms appoint CEOs as outside directors},
  author={Ruediger Fahlenbrach and A. Low and R. M. Stulz},
  journal={Journal of Financial Economics},
  year={2010},
  volume={97},
  pages={12-32}
}
  • Ruediger Fahlenbrach, A. Low, +1 author R. M. Stulz
  • Published 2010
  • Business
  • Journal of Financial Economics
  • Companies actively seek to appoint outside CEOs to their boards. Consistent with our matching theory of outside CEO board appointments, we show that such appointments have a certification benefit for the appointing firm. CEOs are more likely to join boards of large established firms that are geographically close, pursue similar financial and investment policies, and have comparable governance to their own firms. The first outside CEO director appointment has a higher stock-price reaction than… CONTINUE READING
    258 Citations

    Figures and Tables from this paper

    Do CEOs' Outside Directorships Affect the Performance of Their Own Firms?
    • Highly Influenced
    • PDF
    Recruiting the CEO from the Board: Determinants and Consequences
    • 3
    Professional Directors and Governance Quality

    References

    SHOWING 1-10 OF 81 REFERENCES
    Factors affecting the number of outside directorships held by CEOs
    • 356
    • Highly Influential
    CEO Involvement in the Selection of New Board Members: An Empirical Analysis
    • 1,201
    • Highly Influential
    • PDF
    Board Seat Accumulation by Executives: A Shareholder's Perspective
    • 266
    The Determinants of Board Composition
    • 1,466
    Shareholder Rights, Boards, and CEO Compensation*
    • 237
    Outside directors and CEO turnover
    • 4,008
    • Highly Influential
    Reciprocally Interlocking Boards of Directors and Executive Compensation
    • 534
    • PDF