Human and Social Capital in the Labor Market for Directors

Document Type




Publication Date



Emerald Group

Source Publication

Advances in Financial Economics, Volume 16

Source ISSN



Abstract Purpose

This study examines the director labor market to better understand which director attributes are important for board service. Design/Methodology/Approach

Director level data, which includes proxies for both human and social capital, is analyzed to determine which characteristics increase the likelihood of gaining additional board appointments. Findings

We find that general skills and director connections are valued in the marketplace. Among specific director characteristics, financial expertise, holding an MBA degree, and S&P 500 experience are positively associated with gaining new board appointments. Moreover, regardless of the director’s level of expertise, highly connected individuals are more likely to obtain new appointments. Finally, from a range of characteristics, only director connections mitigate the negative consequences of serving on the boards of firms that restate their financials. Originality/Value

While most research has analyzed the effectiveness of boards of directors as a whole, this study examines the value of individual director characteristics within the context of the labor market.


Advances in Financial Economics, Vol. 16, (2013). DOI. © 2009 Emerald Publishing Limited. Used with permission.