【本期主题】The Independence of Independent Directors over Their Tenure: Insights from Insider Trading

We examine the effectiveness of board monitoring of insider trading over independent directors’ tenure. We show that the profitability of private trades by executives increases in independent directors’ tenure. This association is confined to independent directors who are expected to be more effective monitors when they join the board. Executives are more likely to trade opportunistically and during informationally more sensitive time when independent directors serve longer on the board, and these trades are more profitable. Certain governance factors such as the adoption of internal trading policies and blockholders sitting on the board are effective in mitigating the impact of long-tenured independent directors on executive trading profitability. Overall, the evidence suggests that the independence of long-tenured independent directors and their monitoring incentives can be compromised, and executives are more likely to exploit their informational advantages under weaker board monitoring. Consistent with this argument, we show that over their tenure unconnected independent directors are more likely to get socially connected with executives and their own private trades become more consistent with executives’ trades.

【报告人】 黄生

【时 间】4月6日 下午14:00

【地 点】明德主楼509室

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报告人简介：

HUANG Sheng is an Assistant Professor of Finance at Lee Kong Chian School of Business in Singapore Management University. Dr. Huang earned his Ph. D in Economics from Washington University in St. Louis in 2009, M.Phil in Economics from University of Cambridge in 2003, and B.A. in History and Economics from Peking University in 1999. He specializes in the study of corporate finance, corporate governance, and financial intermediation. His research has been presented at leading academic conferences such as American Finance Association (AFA) annual meetings, Western Finance Association (WFA) annual meetings and Financial Intermediation Research Society (FIRS) annual meetings, and won the Best Paper Award at the Seventh Annual Conference on Asia-Pacific Financial Markets (CAFM). He has published his research in leading academic journals, including Review of Financial Studies, Management Science, and Journal of Financial Intermediation.

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