Multiple directorships and the value of cash holdings

Ting Kai Chou, Hsuan Ling Feng

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)


This study examines the impact of multiple directorships on the value destruction associated with increases in cash holdings. We find that the marginal value of cash increases with multiple directorships. Furthermore, the positive relationship between cash value and multiple directorships is more pronounced for firms with higher managerial agency problems. Additional analyses suggest that multi-board directors limit a firm’s holdings of excess cash, and especially directors having current industry affiliations have better ability to perform their monitoring function. Firms with multi-board directors make better cash acquisitions. Multiple directorships improve subsequent operating performance associated with capital expenditures and R&D investments. When firms have limited investment opportunities, multiple directorships result in more dividend payouts of cash. Collectively, our results suggest that multiple directorships are associated with a more efficient use of cash, thereby providing direct benefits to shareholders.

Original languageEnglish
Pages (from-to)663-699
Number of pages37
JournalReview of Quantitative Finance and Accounting
Issue number3
Publication statusPublished - 2019 Oct 1

All Science Journal Classification (ASJC) codes

  • Accounting
  • Business, Management and Accounting(all)
  • Finance


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