Monday, March 25, 2013

Want to increase firm value? Put an academic on the board

Interesting paper that finds that firms with academics on their boards are more profitable.

This research is part of a large literature that looks at the role of the Board of Directors in affecting firm value.  In general this research finds that outside directors (those not affiliated with the firm) provide better governance than insiders.   This paper goes one step further by showing that if those outside directors are B-School academics - the governance effect is even stronger.

Via: Marginal Revolution