| Summary: | This paper explores whether firms that share common directors also pursue similar
corporate policies. Using a sample of 885 U.S. firms with common directors, we find
that director fixed effects strongly explain variation in firms' governance, financial,
disclosure, and strategic policy choices. Moreover, the director fixed effects provide
incremental explanatory power over traditional economic determinants of firms'
policies. consistent with our hypotheses, the director effects are less pronounced in
large firms, in firms with more outside board members, and for directors with
numerous outside board appointments. Our evidence is more consistent with directors
and firms "matching" their policy preferences rather than directors "imposing" their
policy preferences on firms
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