Publication Type

Journal Article

Publication Date

7-2017

Abstract

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.

Keywords

Corporate governance, director tenure, board tenure, board composition, board diversity, CEO turnover, restatement

Discipline

Business and Corporate Communications | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

Contemporary Accounting Research

ISSN

0823-9150

Identifier

10.1111/1911-3846.12332

Publisher

Canadian Academic Accounting Association

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://doi.org./10.1111/1911-3846.12332

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