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We study the relation between opportunistic timing of option grants and corporate governance failures, focusing on "lucky" grants awarded at the lowest price of the grant month. Option grant practices were designed to provide lucky grants not only to executives but also to independent directors. Lucky grants to both CEOs and directors were the product of deliberate choices, not of firms' routines, and were timed to make them more profitable. Lucky grants are associated with higher CEO compensation from other sources, no majority of independent directors, no outside blockholder on the compensation committee, and a long-serving CEO. Copyright (c) 2010 the American Finance Association.

While reformers have argued that multiple directorships for executives can destroy value, we investigate firms with executives that accept an outside directorship and find negative announcement returns only when the executive's firm has greater agency problems. When fewer agency concerns exist, additional directorships relate to increased firm value. Announcement returns are also higher when executives accept an outside directorship in a financial, high-growth, or related-industry firm. Our results suggest that outside directorships for executives can enhance firm value, which has important implications for firms employing executives nominated for outside boards and for policy recommendations restricting the number of directorships. Copyright 2005 by The American Finance Association.

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