New Zealand reintroduced titular honours (i.e. knighthoods and damehoods) in 2009. We document the prevalence of knights and dames on the board of directors.
We use a probit regression to investigate what firm characteristics are significantly associated with having a knight or dame on the board of directors.
We find 19 of 112 companies have a knight or dame on the board. These companies are bigger and have larger and more independent boards than other companies. We also find a knight or dame is more likely to serve in companies that have higher dividend yields.
The generalisability of our results is limited by the small number of knights and dames on the boards of listed companies and our archival regression approach. Although we document an association, we cannot prove causation.
We show that directors with greater and easily visible reputational capital are more likely to supply their services to companies that mitigate risks to their reputation and protect minority shareholder interests.
