Do CEOs and Directors Get Sick of Attending Meetings?
July 8, 2013 Leave a comment
Do CEOs and Directors Get Sick of Attending Meetings?
Stephen Gray University of Queensland – Business School; Duke University – Fuqua School of Business; Financial Research Network (FIRN)
John Nowland City University of Hong Kong
June 26, 2013
Abstract:
This study examines whether CEO and director attendance is affected by additional board and committee meetings. Using a hand-collected Australian dataset of 21,691 observations of the number of board and committee meetings held and attended by directors from 2004 to 2007, we find that attendance rates for both outside and inside directors decrease (non-random absences increase) when they are required to attend more board meetings. The marginal effect is that the average outside (inside) director has a 14% (12%) likelihood of missing an additional board meeting. Further analysis shows that the negative relationship between board meetings and attendance rates is consistent across directorships in a range of firms, including when more meetings are associated with poor performance, M&A activity and CEO turnover. The results for committee meetings are mixed, indicating that director attendance is not consistent across different types of meetings. In summary, our analysis indicates that any benefits firms obtain from holding additional meetings are being eroded by lower director attendance, a result that should be of particular interest to shareholders and policymakers.
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