Publication Type
Journal Article
Version
submittedVersion
Publication Date
9-2018
Abstract
This study examines the impact of director tenure diversity on board effectiveness. We find that tenure-diverse boards exhibit significantly higher CEO performance-turnover sensitivity and that firms with tenure-diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure-diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure-diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. 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 help enhance board monitoring.
Keywords
Corporate governance, director tenure, board tenure, board composition, board diversity, CEO turnover, restatement
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Contemporary Accounting Research
Volume
35
Issue
3
First Page
1363
Last Page
1394
ISSN
0823-9150
Identifier
10.1111/1911-3846.12332
Publisher
Canadian Academic Accounting Association
Citation
LI, Na and WAHID, Aida Sijamic.
Director tenure diversity and board monitoring effectiveness. (2018). Contemporary Accounting Research. 35, (3), 1363-1394.
Available at: https://ink.library.smu.edu.sg/soa_research/1630
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/1911-3846.12332