Stock Market Reactions to Board Appointments

37 Pages Posted: 5 Jan 2004

See all articles by Yuen Teen Mak

Yuen Teen Mak

National University of Singapore (NUS) - Department of Accounting

John M. Sequeira

National University of Singapore (NUS) - NUS Business School

Mei Chyi Yeo

affiliation not provided to SSRN

Date Written: October 2003

Abstract

This study examines the reaction of the stock market to the appointment of directors, and whether this is conditional on directorial characteristics such as appointment type, number of directorships held, boardroom experience, and the existence of any family relationship. We find that the stock price effect of the appointment of busy directors is significantly negative with similar results obtained for family-related directors' appointments. The market reaction to appointment of directors with prior boardroom experience is found to be significantly positive. We also find evidence that the appointment of non-executive directors is valued more highly by the stock market.

Keywords: Corporate Governance, Board of Directors

JEL Classification: G32, G34, L22

Suggested Citation

Mak, Yuen Teen and Sequeira, John M. and Yeo, Mei Chyi, Stock Market Reactions to Board Appointments (October 2003). Available at SSRN: https://ssrn.com/abstract=468460 or http://dx.doi.org/10.2139/ssrn.468460

Yuen Teen Mak (Contact Author)

National University of Singapore (NUS) - Department of Accounting ( email )

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John M. Sequeira

National University of Singapore (NUS) - NUS Business School ( email )

1 Business Link
Singapore, 117592
Singapore

Mei Chyi Yeo

affiliation not provided to SSRN

No Address Available

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