Why do firms appoint CEOs as outside directors

  title={Why do firms appoint CEOs as outside directors},
  author={Ruediger Fahlenbrach and A. Low and R. M. Stulz},
  journal={Journal of Financial Economics},
  • 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
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