حجم کار مدیران، حضور و عملکرد شرکت Director workloads, attendance and firm performance

Introduction Over time, directors are being required to spend more time and effort on their corporate directorships. National Association of Corporate Directors (NACD) surveys indicate that the average time commitment per directorship in public companies increased from 207.4 hours in 2007 to 278.1 hours in 2014.1 This increased effort by directors should be beneficial to firms and their shareholders through an increase in the effectiveness of the monitoring and advising functions of the board. However, it is also possible that many directors are too busy to absorb this additional workload into their schedules, meaning they are not able to fulfill all of their obligations to shareholders. Prior studies have investigated the effects of higher director workloads on firm performance, with some encouraging results. Brick and Chidambaran (2010) find that board meeting activity is positively related to firm value. Vafeas (1999) finds that firm performance improves following increased board effort, in the form of extra board meetings. However, other studies also highlight the existence of busy directors and document the negative consequences of busy directors on corporate boards, including less effective monitoring, excessive CEO compensation, failure to fire underperforming CEOs and lower firm performance (Core et al., 1999; Fich and Shivdasani, 2006; Jiraporn et al., 2009; Mendez et al., 2015). In this study, we bring these two strands of literature together. We propose that increased director workloads (e.g. additional board and committee meetings) can be beneficial to firms if directors have extra time available to spend on their directorships. But, if directors are too busy to incorporate these increased workloads into their schedules, the benefits firms receive from additional meetings are likely to be eroded. Thus, the focus of this study is two-fold. First, we investigate the relationship between director workloads and director attendance to determine whether additional board and committee meetings cause directors to become too busy, resulting in lower director attendance. Second, we examine the combined effect of increased director workloads and lower director attendance on firm performance.