Multiple directorships and corporate reputation

Abstract

The previous literature suggests that firms may use the characteristics of the board members as a signal for building their own image. The objective of this paper is to analyze whether the number of appointments of directors influences corporate reputation. For that, we focus on a sample of US firms listed on the New York Stock Exchange (NYSE) for the period 2007-2010 and we examine a total of 30,813 directors. Our results indicate that there is a curvilinear relationship between the number of directorships of board members and corporate reputation. These findings shed some light on the value of boards of directors and also have implications for companies in the selection of board members.