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The Characteristics of the Directors

  • Ettore Croci
Chapter

Abstract

This chapter discusses directors’ attributes such as social ties , reputation , geographic proximity, and expertise . The concept of independence needs to encompass social ties and connections to be effective. Directors vary according to their reputation and respond to reputation incentive s, especially when an efficient labor market for directors exists. Despite the available technologies, the geographical proximity of directors to a firm’s headquarters still provides an advantage when decisions are based on soft information . Firms often add experts to their boards. While industry expertise and specific expertise have on average a positive effect on firm value, the evidence about financial expertise is less clear. For bank s, financial expertise is associated with more risk-taking. Overall, directors are a very heterogeneous group, with diverse backgrounds, characteristics, and incentive s.

Keywords

Social ties Geographic proximity Reputation Incentive Expertise Skill 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Ettore Croci
    • 1
  1. 1.Università Cattolica del Sacro CuoreMilanoItaly

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