Seminário de Pesquisa 25/06
Deixe um comentário / Economia Aplicada, Seminários de Pesquisa / Por Helena Camillo
Ocorrerá no dia 25/06/2025, quarta-feira, às 14h na sala 402 – FCE, o Seminário de Pesquisa “Too busy to mind their business? The role of busy directors and their compensation in firm performance and resilience”, na área de Economia Aplicada, ministrado pelo Dr. Cristian Foguesatto (UFRGS).
Resumo:
Busy board members’ experience, network, and expertise make them valuable monitors and advisors. As such, their compensation packages should reflect these attributes. However, there is conflicting evidence regarding the trade-offs between the advantages and disadvantages of directors holding multiple directorships. In this study, we examine whether busy board members are compensated more generously and, if so, explore the role they play in firm performance and resilience (severity of loss and time to recovery), taking their compensation into account. We analyze data from over 17,000 board members across 918 publicly traded non-financial American companies from 2008 to 2024. Our findings show that busy directors receive higher compensation and contribute positively to firm performance. While greater compensation is associated with improved firm performance, the interaction between compensation and busyness is not significant to performance and even jeopardizes the positive effects compensation and busyness bring. We provide evidence supporting the reputation hypothesis, suggesting that busy directors enhance firm performance due to their reputation rather than higher compensation. The contrary is evidenced for turbulent times with busy directors contributing to financial resilience only when the right monetary incentive is given to them.