The costs of appointing foreign independent directors may outweigh the benefits
This study explored how having foreign directors on a board affected a company. For the most part, researchers found that the presence of a foreign director negatively impacted governance. Firms with a foreign director were more likely to misrepresent earnings, overcompensate the CEO, and overlook poor CEO performance. However, foreign directorships seemed to help firms earn higher returns on the acquisitions they made in the director鈥檚 region of origin.
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