An Examination of Board Meeting Frequency and CEO Characteristics: A Comparison of Dividend Paying and No-Dividend Firms

Abstract

This abstract was created post-production by the JFI Editorial Board.

The monitoring role of corporate boards has been under close scrutiny by dissatisfied investors in recent years. The Institutional Shareholder Service, Inc., the Business Roundtable, and the National Association of Corporate Directors advocate many suggestions regarding how to improve corporate governance. In this research, we investigate the relation between board monitoring activities, measured by board meeting frequency, and various firm and CEO characteristics under differential dividend payout policies.

The theoretical and empirical literature on corporate governance and managerial entrenchment makes a number of unambiguous predictions regarding corporate board activities. We examine these implications and differential characteristics between dividend-paying firms and non-dividend firms by considering firm attributes and managerial compensation contracts. While our results support the theoretical predictions, we also find significant difference between dividend-paying firms and non-dividend firms regarding the board meeting frequency. We also find that duality of CEOs can increase the likelihood of holding more board meetings and the weight of intangible assets do not significantly affect the likelihood of board meeting frequency.