RESEARCH
Most directors can cope with serving on multiple boards
Many stakeholders have raised concerns about the adverse consequences of director overboardedness globally and locally. This phenomenon occurs when a director serves on several boards concurrently. International studies have shown that corporate governance and financial performance is typically weaker in companies where the board consists of many "busy" directors. Researchers have classified a director as overboarded if he or she serves on three or more boards concurrently. Two contrasting hypotheses have emerged to explain the consequences of director overboardedness. The "busyness" hypothesis suggests that directors who serve on multiple boards at the same time face significant time constraints that might impede their ability to discharge their duties effectively. In contrast, the "experience" hypothesis postulates that directors can gain considerable know-how and social capital by serving on multiple boards at the same time.
Given limited research on the topic, we tested bo...
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