Too Busy To Serve? An Examination of the Influence of Overboarded Directors

TLDR

Overboarded directors, who serve on many boards, are criticized for being stretched thin, potentially compromising their governance responsibilities. This study examines how overboarded directors influence corporate acquisition decisions. The analysis shows that overboarded directors enhance acquisition performance by providing valuable knowledge and complementing inside and non‑overboarded outside directors.

Abstract

ABSTRACT Overboarded directors (i.e., those serving on too many boards) have come under recent attack. The accusation is that such directors are ‘stretched’ by several directorships and therefore cannot fulfil their governance responsibility. This study investigates the impact of overboarded directors upon key strategic decisions such as corporate acquisitions. Based on our examination of acquisition outcomes, we found that such directors are important sources of knowledge and enhance acquisition performance. Moreover, they represent an important complement to inside and non‐overboarded outside directors.