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Heinrich-Heine-Universität Düsseldorf >
Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf >
DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE) >
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http://hdl.handle.net/10419/48601
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| Title: | | Outside board memberships of CEOs: Expertise or entrenchment?  |
| Authors: | | Balsmeier, Benjamin Buchwald, Achim Peters, Heiko |
| Issue Date: | | 2011 |
| Series/Report no.: | | DICE discussion paper 26 |
| Abstract: | | We investigate whether outside board memberships of CEOs signal expertise or entrenchment. The analysis is based on panel data of the largest German companies covering the period from 1996 to 2008. Supporting the entrenchment hypothesis, our analysis reveals that firms having a CEO with one or more outside mandates suffer from significantly weaker firm performance compared with firms having a CEO without any outside board mandates. Moreover, disciplinary CEO turnovers become less likely and turnover-performance sensitivity declines with rising board memberships of the top manager. We conclude that outside mandates enhance managerial power at the expense of the home firm's shareholders. |
| Subjects: | | Corporate Governance Entrenchment Outside Board Memberships CEO turnover |
| JEL: | | J24 J63 L25 M50 |
| Document Type: | | Working Paper |
| Appears in Collections: | | DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)
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