An Investigation of the Impact of Academicians as Directors

Abstract

In this study, we investigated the impact of academicians as board members on firm outcomes. Based on popular theories of corporate governance, we contend that firms with academicians as directors would have more vigilance on their boards, would perform better based on accounting measures, and would be perceived as more valuable based on a market measure. Using a matched-pair design, our results showed that firms with academician directors do not have more vigilance on their boards and do not differ based on their accounting performance. However, they are perceived to be more valuable, which signifies the possible positive impact of academicians on one of the organizational outcomes. Theoretical and practical implications of these findings are discussed.