This study investigates how multiple directorships, often referred to as “busy” boards, influence corporate value orientation, as measured by long-term investor value appropriation (LIVA).
We draw data on US-listed firms from the Center for Research in Security Prices and Compustat. We measure corporate long-term orientation using LIVA. Using a sample of 12,581 firm-year observations, we estimate multiple regression models to analyze the relationship between busy directorships and firms’ long-term orientations.
The findings indicate a significant negative association between the number of directorships and LIVA, with stronger adverse effects for busy outside directors than for busy inside directors. The research also explores how internal and external organizational factors shape outside directors’ oversight capacity. Specifically, a one-standard-deviation increase in board busyness reduces LIVA by about 1.8 times the average firm-level LIVA, indicating substantial economic significance.
The results suggest that governance frameworks that emphasize long-term objectives can mitigate oversight challenges associated with busy outside directors. Accordingly, firms should limit excessive board appointments, while regulators and investors should promote transparency in directors’ external commitments to strengthen sustainable corporate governance.
This study provides one of the first empirical examinations of how multiple directorships affect long-term value orientation. By integrating corporate governance and sustainability perspectives and leveraging unique large-scale datasets, the study offers novel evidence on how directors’ board commitments influence firms’ sustainability-related governance outcomes.
