Do corporate boards matter during the current financial crisis?

  • Francis B
  • Hasan I
  • Wu Q
  • 35

    Readers

    Mendeley users who have this article in their library.
  • 19

    Citations

    Citations of this article.

Abstract

This study examines the impact of corporate boards on firm performance during the current financial crisis. Using buy-and-hold abnormal returns over the crisis to measure firm performance, we find that board independence, as traditionally defined, does not significantly affect firm performance. However, when we redefine independent directors as outside directors who are less connected with current CEOs, a measure we call strong independence, there is a positive and significant relationship between this measure and firm performance. Second, outside financial experts are important for firm performance. We find that the positive impact of outside financial experts on firm performance is more significant than that of strong independence. Overall, our results suggest that firm performance during a crisis is a function of firm-level differences in corporate boards. © 2012 Elsevier Inc.

Author-supplied keywords

  • Boards of directors
  • Financial crisis
  • Financial experts
  • Firm performance
  • Independence

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free