Can Globalized Board Room Help with Cross-listing? the Effects of U.s. Directors on Cross-listed Foreign Firms

chinmoy ghosh (university of connecticut, USA)

fan he (central CT state university, USA)

Haoyong zhou (Keele University, UK)

Abstract: This study examines the impact and effectiveness of U.S. independent directors on the board of cross-listed foreign firms. About 53% of foreign firms appoint U.S. independent directors before they come to U.S. market and we find that these firms with U.S. directors are able to gain higher increase in value through cross-listing than firms without. The impact of U.S. directors on value is strongest for firms from weak investor protection countries, consistent with the idea that U.S. directors are effective monitors. We also find that foreign firms with U.S. directors are better acquirers in both domestic and cross-border M&As and are less likely to receive class action lawsuits.