Better Directors or Distracted Directors? An International Analysis of Busy Boards

This study examines the effect of busy directors and boards on the value of a set of international firms from 1999-2012. We find that busy directors and boards are a global phenomenon. We discover that national culture helps to explain the cross-sectional variation in director and board busyness. We determine that firms with busy boards exhibit lower market-to-book ratios and reduced profitability. This effect, however, is reversed for younger firms. We conclude that the advising ability of these networked directors is useful for younger firms. A demographic analysis shows that multiple directorships are positively associated with firm performance and education, but negatively associated with female directors.