Busy Directors with Distant Board Positions: Superstar Directors or Lost in Translation?

Based on a novel worldwide data set covering listed firms from 54 countries we study the effect of director busyness. Hypothesizing that there are superstar directors in the pool of directors, which eventually end up with multiple directorships, we argue that – in contrast to local positions – distant board positions likely reflect superior director skills. Calculating travel distances and identifying exogenous retirements, we find that busy directors with high (low) travel distance are beneficial (detrimental) to firm value. Interestingly, our data suggests that these superstar directors improve monitoring, but are not necessarily better advisors.