Lawyers and Fools: Lawyer-Directors in Public Corporations

Litov, L.; Sepe, Simone M.; Whitehead, Charles K.

doi:10.2139/ssrn.2218855

Cited by 39 publications

(46 citation statements)

References 5 publications

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“…Sisli‐Ciamarra () focuses on banker directors and finds that the presence of banker directors is associated with a greater use of debt in a firm's capital structure and more favorable debt contract terms. A recent study by Litov et al () investigates the rise of lawyer directors. They find that lawyer directors reduce corporate risk‐taking and increase firm value.…”

Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

Professors in the Boardroom and Their Impact on Corporate Governance and Firm Performance

Francis

Hasan

2015

Financial Management

218

125

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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 turnoverperformance 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. JEL Classification: G30; G34; M41

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Section: Related Literature and Hypotheses Developmentmentioning

confidence: 99%

Professors in the Boardroom and Their Impact on Corporate Governance and Firm Performance

Francis

Hasan

2015

Financial Management

218

125

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“…In theory, we believe that graduates could positively affect the decision making process among board members; however we believe that degrees do not confer the same level of skills. In a recent study, Litov et al (2013) find that lawyers directors reduce corporate risk-taking and increase firm value. Audretsch and Lehmann (2006) argue that directors with academic backgrounds can enhance the competitive advantage of firms by facilitating access to and the absorption of external knowledge spillover.…”

Section: H3: Older Boards Of Directors Tend To Reduce the Company Rismentioning

confidence: 98%

Which Demographic Characteristics of Directors Affected the Company Risk Level?

Lippi¹,

Battista²

2017

IJEF

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The board of directors is a group of people whose decision making can affect company life. In particular, the decision to have more liabilities than equity capital, makes a firm more aggressive than others in the market. The aim of this paper is to test the relationship between some demographic characteristics of directors and the firm's propensity to risk. In particular our analysis consider gender, age of the directors, independence and educational level. Moreover work experiences are considered. The results obtained should be considered by regulators and firm statutes as guidelines for future board composition.

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“…This could be expected as a result of the possibility that lawyer-directors lack necessary firm-specific information about the complexity of the operations of the company. Litov et al (2014) provide evidence suggesting that firms with lawyers on the boards of directors are associated with significant increases in firm value. In addition, Litov et al show that existence of lawyer-directors affects the CEO risk taking incentives and the existence of entrenchment provisions such as poison pills.…”

Section: Professional Expertisementioning

confidence: 98%

Educated Professionals on Boards at Borsa Istanbul

Arioglu

2014

SSRN Journal

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This study aims to investigate the educational backgrounds and professional expertise of the directors in firms quoted at Borsa Istanbul. The findings of the study reveal that, a higher percentage of directors with advanced degrees such as PhDs, serve on various board committees, and a higher percentage of them are assigned as independent directors to the boards, compared to directors of lower educational qualifications. In addition, the findings suggest that a higher percentage of directors, who are professional experts such as accounting experts, lawyers or professors, serve on various committees of the boards, and a higher percentage of them are assigned as independent directors to boards. In contrast, a lower percentage of professional experts with advanced educational degrees serve as CEOs or chairmen of boards. These results suggest that technical skills and knowledge of directors are valued highly by companies, whereas they are not as highly valued in top managerial positions.

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Lawyers and Fools: Lawyer-Directors in Public Corporations

Cited by 39 publications

References 5 publications

Professors in the Boardroom and Their Impact on Corporate Governance and Firm Performance

Professors in the Boardroom and Their Impact on Corporate Governance and Firm Performance

Which Demographic Characteristics of Directors Affected the Company Risk Level?

Educated Professionals on Boards at Borsa Istanbul

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