The incidence and determinants of multiple corporate directorships

Contrary to the concerns of the Council of Institutional Investors and other shareholder activists, it is reported that the incidence of multiple board memberships appointments by corporate directors is low, with only 4% of the sample holding three or more seats. It is found that directors in regulated industries hold fewer board memberships than those in unregulated businesses. Firm size, board size, firm performance and corporate growth opportunities positively influence the number of directorships held by individual directors. It is further discovered that increased equity ownership of the firm by the board is associated with fewer external appointments by the board members. It is concluded that proposals to limit the number of directorships held by an individual may be ill-advised.