The Impact of Director Reputation and Performance on the Turnover and Board Seats of Target Firm Directors

This study examines factors that explain the turnover and board seats held by target firm directors post-takeover. Following successful takeovers the proportion of the board replaced is lower when the target has better performance. In failed takeovers, executive directors have lower turnover and the rate of turnover is reduced after a hostile takeover. Inconsistent with ex-post settling-up, actions that advance target shareholder wealth during the takeover does not assist a director obtain an increase in future board seats. Confirming a reputation effect, directors with multiple directorships have a lower rate of turnover and a higher increase in future board seats.