Abstract
The extant board governance literature has generally examined the relationship between the characteristics of directors and their monitoring performance in isolation. To overcome the limitations of this approach, Hambrick, Misangyi and Park (2015, AMR) have proposed the board quad model, which combines the four individual directors’ attributes of independence, expertise, bandwidth and motivation. In this paper, we investigate the validity of model in the context of CEO turnover decisions. To define whether individual directors are quad-qualified, we create composite measures of each attribute based on director-level employment, stock ownership & social network data and then construct an encompassing quad-qualification score. Using logistic regression analysis, we find that a greater presence of quad-qualified directors leads to a greater CEO turnover sensitivity to stock performance. Furthermore, we show that the turnover-performance sensitivity increases in particular for boards with three or more quad-qualified members. Implications for practice and theory are discussed.
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