Accounting for Taste: Board Member Preferences and Corporate Policy Choices
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'...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | en_US |
| Published: |
2003
|
| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/3515 |
| _version_ | 1811086386640453632 |
|---|---|
| author | Richardson, Scott Tuna, A. Irem Wysocki, Peter D. |
| author_facet | Richardson, Scott Tuna, A. Irem Wysocki, Peter D. |
| author_sort | Richardson, Scott |
| collection | MIT |
| description | 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 |
| first_indexed | 2024-09-23T13:25:11Z |
| format | Working Paper |
| id | mit-1721.1/3515 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T13:25:11Z |
| publishDate | 2003 |
| record_format | dspace |
| spelling | mit-1721.1/35152019-04-10T23:47:30Z Accounting for Taste: Board Member Preferences and Corporate Policy Choices Richardson, Scott Tuna, A. Irem Wysocki, Peter D. Board of Directors Corporate Governance Corporate Policies Disclosure 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 2003-05-23T19:36:44Z 2003-05-23T19:36:44Z 2003-05-23T19:36:44Z Working Paper http://hdl.handle.net/1721.1/3515 en_US MIT Sloan School of Management Working Paper;4307-03 266604 bytes application/pdf application/pdf |
| spellingShingle | Board of Directors Corporate Governance Corporate Policies Disclosure Richardson, Scott Tuna, A. Irem Wysocki, Peter D. Accounting for Taste: Board Member Preferences and Corporate Policy Choices |
| title | Accounting for Taste: Board Member Preferences and Corporate Policy Choices |
| title_full | Accounting for Taste: Board Member Preferences and Corporate Policy Choices |
| title_fullStr | Accounting for Taste: Board Member Preferences and Corporate Policy Choices |
| title_full_unstemmed | Accounting for Taste: Board Member Preferences and Corporate Policy Choices |
| title_short | Accounting for Taste: Board Member Preferences and Corporate Policy Choices |
| title_sort | accounting for taste board member preferences and corporate policy choices |
| topic | Board of Directors Corporate Governance Corporate Policies Disclosure |
| url | http://hdl.handle.net/1721.1/3515 |
| work_keys_str_mv | AT richardsonscott accountingfortasteboardmemberpreferencesandcorporatepolicychoices AT tunaairem accountingfortasteboardmemberpreferencesandcorporatepolicychoices AT wysockipeterd accountingfortasteboardmemberpreferencesandcorporatepolicychoices |