Busy directors and firm performance: a replication and extension of Hauser (2018)

We replicate the 2018 study by Hauser and examine whether director appointments impact firm performance by exploiting the exogenous reduction in board appointments generated by mergers that terminate target boards. Using an extended sample, we find increases in return on assets and Tobin’s q for firms with a reduction in board appointments (i.e., treated firms), confirming the results in Hauser’s study. In further analysis, we find greater improvements in firm performance when the target and treated firms are from different industries than if they are from the same industry. The results further demonstrate that director appointments influence firm performance via a workload channel.