Corporate Governance

When Directors Go - What Do They Know?

By Jessica N. Dell

Its official, the surprise resignation of an outside director is a harbinger of bad news.  The D&O diary reports this week on the findings of an academic paper entitled "The Dark Side of Outside Directors: Do They Quit When They Are Needed Most?" by Rüdiger Fahlenbrach, Angie Low and René M. Stultz.   The copyrighted paper reveals particular incentives for outside directors to jump ship before storms hit, and documents the sharply increased incidence of securities fraud suits on the heels of those departures. 

Full post as published by PomTalk on June 11, 2010 (boomark / email).