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Evidence on the Value of Director Monitoring: A Natural Experiment


Abstract I examine the determinants and implications of the level of director monitoring. I use the distance between directors' domiciles and firm headquarters as a proxy for the level of monitoring and the introduction of a new airline route between director domicile and firm HQ as an exogenous shock to the level of monitoring. I find a strong relation between distance and both board meeting attendance and director membership on strategic versus monitoring committees. Increased monitoring, as measured by a reduction in effective distance, by way of addition of a direct flight, is associated with a 3% reduction in firm value. A reduction in effective distance is also associated with less risk-taking, lower stock return volatility, lower accounti... (more)
Created Date 2014
Contributor Bennett, Benjamin Frank (Author) / Coles, Jeffrey (Advisor) / Hertzel, Michael (Committee member) / Babenka, Ilona (Committee member) / Custodio, Claudia (Committee member) / Arizona State University (Publisher)
Subject Finance / Board Structure / Corporate Governance / Director Duties
Type Doctoral Dissertation
Extent 53 pages
Language English
Copyright
Reuse Permissions All Rights Reserved
Note Ph.D. Business Administration 2014
Collaborating Institutions Graduate College / ASU Library
Additional Formats MODS / OAI Dublin Core / RIS


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Description Dissertation/Thesis