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This study examines the voting behaviour of independent directors from academia based on manually collected voting data. We find that academic independent directors are less likely to dissent on board proposals than other independent directors, especially the directors who have fewer industry-specific experiences or have a relatively higher pay from the focal firm. The academic directors are also more likely to lose board seats after dissension, consistent with their concern of less job security as they are easily replaced. Lastly, although academic directors generally have weaker incentives to vote against insiders, they are more likely to dissent on proposals concerning related-party transactions. Overall, our study sheds new light on the role of academic independent directors in board monitoring effectiveness. [ABSTRACT FROM AUTHOR]

This study examines if unsuccessful takeovers trigger the replacement of directors and changes in other governance attributes and result in improvements in target firm performance. Using an Australian sample this study finds that following failed bids, target firms are more likely to remove directors and experience an increase in director ownership, board independence, and block ownership. In contrast, target firm director expertise and prestige decrease following failed bids. We also find that post‐bid accounting and stock performance of targets are largely unrelated to changes in governance attributes after the unsuccessful takeover. [ABSTRACT FROM AUTHOR]

This study aims to board online exposure, board tenure, and firm performance to change of director in 50 non-financial indexed companies listed on the Indonesia Stock Exchange (IDX) during the 2015-2019 period. This research is quantitative research using secondary data in the form of annual reports and financial reports. This study uses Pooled Least Square (PLS) with panel regression data processed through STATA 16. The results of this study found that exposure had a positive effect on the decision to add library members. The term of office simultaneously has a negative effect on the decision to add and remove members of the board of commissioners and the library. The company's performance has a positive effect on the reduction of commissioners. Online exposure and firm performance correlate with director turnover as a corporate governance control mechanism. This research has an implication to practitioners considering that one determining factor of director turnover is their exposures.

This study investigates the likelihood of director turnover following opportunistic insider selling. Given that opportunistic insider selling may be costly to a firm due to potential legal risk and firm legitimacy concerns, we hypothesize that directors engaging in this type of transactions have a higher likelihood of subsequently leaving the board. Using archival data of 11,409 directors in 2280 US firms from 2005 to 2014, univariate comparisons show that directors engaging in opportunistic insider selling are about 8% more likely to exit their firms' board compared to directors not engaging in this behavior. Furthermore, multivariate results show that the likelihood of director departure following opportunistic insider selling is higher for some directors but not all. Specifically, directors who are especially valuable to the board or costly to replace do not seem to experience elevated levels of turnover. Interestingly, this difference in director turnover is only observed in smaller firms. We find that in larger firms, the likelihood of director turnover following opportunistic insider selling does not depend on director characteristics. As such, results seem to suggest that boards do not homogeneously self-regulate in this context as some directors seem to be shielded from turnover following unethical behavior. [ABSTRACT FROM AUTHOR]

We investigate the role of family ownership on turnover within a firm’s board of directors when the firm appoints a new board chair. We conduct regression analysis using financial and governance data of public companies in the United States. We test new theoretical relationships linking the appointment of the new chairs and director turnover at different levels of family influence based on the Attraction-Selection-Attrition theory. We find that directors are more likely to exit when a new chairperson is appointed due to changes in board governance. In family firms, however, overall board governance is more consistent due to the family’s significant controlling power and the family’s direct or indirect support of the board leadership and governance function; as a result, family ownership of a company moderates the effect of having a new chair on the board in the likelihood that a director exits its board. This study enhances the understanding of how corporate boards renovate themselves as they strive to become more effective. Particularly, it helps explain whether a firm can deliver intended innovation when they announce an appointment of a new chairperson in response to the need for change in stagnant financial performance situations or by external pressure.

Research Question/Issue: We investigate outside director departures prior to management buyout offers (MBOs). In these transactions, managers have both an information advantage and incentives to make a lowball offer to shareholders. Outside directors can safeguard against managerial self‐dealing by negotiating for the best terms for public shareholders from either management or another bidder. Research Findings/Insights: It is typical that outside directors stay on the board through an MBO offer as MBOs are less likely to have changes in directors—either joining or leaving—relative to a control sample. After controlling for endogeneity as well as firm and director characteristics, we find that outside directors are more likely to leave when the offer is later contested. We do not find any evidence that departing directors are replaced by new outside directors who ensure shareholders get a higher premium nor do we find any evidence that the board acts as a public auctioneer. We also find that outside directors are more likely to depart when the buyout contest is longer. Our findings show that outside directors provide a weak internal monitoring mechanism as they leave precisely when shareholders need their expertise the most. Theoretical/Academic Implications: Our results contribute to research that supports the notion that outside director departures are symptomatic of board weakness. The results of our study support the contention of other researchers that outside directors often fail to monitor managers. Practitioner/Policy Implications: Our study offers useful information to M&A investment banking advisors and leverage buyout analysts by showing the mechanisms under which director turnover can affect the value and the outcome of MBOs. [ABSTRACT FROM AUTHOR]

This paper analyzes the labor market (turnover and appointments) of executive and non‐executive directors by means of social network methodology. We find that directors with strong networks are able to obtain labor market information that enables them to leave their firm more easily for better opportunities. Networks also mitigate information asymmetry problems of external director appointments. Furthermore, the strong impact of indirect connections is in line with the 'strength of the weak ties' theory. The fact that direct connections are less important signifies that the connections to people that are close and local are likely to convey redundant information, whereas connections to distant individuals are more efficient in terms of information acquisition and labor market performance improvement. [ABSTRACT FROM AUTHOR]

In Australia, a corporate acquisition can be structured as either a scheme of arrangement or a takeover. We investigate the association between deal structure and the retention of target directors on the merged entity board. We find that the odds of a target director subsequently sitting on the merged entity's board are significantly higher in schemes. The results also show that premiums are lower in schemes of arrangement when additional target directors are appointed to the board of the acquiring firm. The findings indicate that target director appointment is unrelated to the merged entity's post‐acquisition performance. [ABSTRACT FROM AUTHOR]

Abstract We study director turnover as a corporate governance mechanism in family firms; specifically, the effect that family involvement in management, ownership, and control has on director turnover (direct effect) and on director turnover-performance sensitivity (moderating effect). Using a sample of Colombian companies, we find a negative relationship between turnover and firm performance. Additionally, we find that family involvement in management, ownership, and on boards leads to (1) more stable directorships and reduced director turnover and (2) cancellation of the expected director turnover-performance sensitivity. This last result implies that director turnover in firms with family influence is not driven by financial results, which suggests greater (more severe) agency conflicts between controlling families and minority shareholders. Finally, we find that family involvement as indirect ownership through pyramidal control increases director turnover, which suggests the existence of internal markets for directors within business groups. [ABSTRACT FROM AUTHOR]

We examine the effect of a change in the director election system-the switch from a plurality voting standard to a more stringent standard known as majority voting (MV). Using a regression discontinuity design, we document abnormal returns of 1.43-1.60 % around annual meeting dates where shareholder proposals to adopt MV are voted upon, suggesting that shareholders perceive the adoption of MV as value-enhancing. We document an increase in boards' responsiveness to shareholders at MV firms. In particular, relative to a propensity score-matched control sample, firms adopting MV exhibit an increase in the rate of implementation of shareholder proposals supported by a majority vote and in the responsiveness to votes withheld from directors up for election. We do not find a relation between votes withheld and subsequent director turnover, regardless of the election standard. Overall, it appears that, rather than a channel to remove specific directors, director elections are viewed by shareholders as a means to obtain specific governance changes and that, in this respect, their ability to obtain such changes is stronger under a MV standard. [ABSTRACT FROM AUTHOR]