Directors frequently hold multiple board seats, simultaneously lending their expertise to the boards of multiple firms. Director “busyness” is often thought to be detrimental to firm performance, as it leaves directors with insufficient time to devote to their duties at each firm. However, multiple directorships also foster valuable connections among firms that facilitate the flow of information and resources across boards.
There are challenges in trying to assess whether multiple directorships are beneficial or detrimental to firm performance. For example, directors with the highest ability tend to be sought after to serve on multiple boards. These directors may perform adequately … Read more