This study examines the impact of director tenure diversity on board effectiveness. We findthat tenure-diverse boards exhibit significantly higher CEO performance-turnoversensitivity and that firms with tenure-diverse audit committees are less likely to experienceaccounting restatements. Furthermore, we document that tenure-diverse compensationcommittees also award less excess compensation and are less likely toovercompensate. Even though tenure-diverse boards seem to exhibit superior monitoringperformance, there is limited evidence that their firms exhibit superior financialperformance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board tenure, may helpenhance board monitoring.
Corporate governance, director tenure, board tenure, board composition, board diversity, CEO turnover, restatement
Business and Corporate Communications | Corporate Finance
Corporate Reporting and Disclosure
Contemporary Accounting Research
Canadian Academic Accounting Association
LI, Na and WAHID, Aida Sijamic.
Director tenure diversity and board monitoring effectiveness. (2017). Contemporary Accounting Research. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/1630
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