Board composition, board diversity and stock performance

• Main Authors: CHIRAPHOL, Chiyachantana N., PATTANAWIHOK, Siripen, PrRASARNPHANICH, Pattarawan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: Corporate governance; Board structure; Board composition; Stock return; Abnormal return; Corporate Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6840; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7839/viewcontent/229_455_1_PB_pvoa.pdf
• Institution: Singapore Management University

The study investigates the relationship between six board compositions and stock returns. The results indicate a significant association between various board compositions and stock returns. Specifically, board size and executive directors have a negative impact, whereas independent directors enhance stock returns. Busy directors positively impact the abnormal stock returns for the companies in the non-financial industry, which implies that busy directors who serve on more boards tend to be well connected. More importantly, the results indicate a significant positive relationship between board tenure and stock returns. Board service time is perceived as the board quality of knowledge and experience from the investors’ point of view.