Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212290 
Year of Publication: 
2014
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 15/2014
Publisher: 
Bank of Finland, Helsinki
Abstract: 
Directors from academia served on the boards of around 40% of S&P 1,500 firms over the 1998-2011 period. This paper investigates the effects of academic directors on corporate governance and firm performance. We find that companies with directors from academia are associated with higher performance and this relation is driven by professors without administrative jobs. We also find that academic directors play an important governance role through their advising and monitoring functions. Specifically, our results show that the presence of academic directors is associated with higher acquisition performance, higher number of patents and citations, higher stock price informativeness, lower discretionary accruals, lower CEO compensation, and higher CEO forced turnover-performance sensitivity. Overall, our results provide supportive evidence that academic directors are valuable advisors and effective monitors and that, in general, firms benefit from having academic directors.
Persistent Identifier of the first edition: 
ISBN: 
978-952-6699-88-2
Document Type: 
Working Paper

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