Event Title

An Analysis of The Exogenous Deaths of Directors During The 1960s and Their Implications

Session Number

Project ID: BHVSO 04

Advisor(s)

Dr. Carola Frydman, Kellogg School of Management, Northwestern University

Discipline

Behavioral and Social Sciences

Start Date

20-4-2022 9:30 AM

End Date

20-4-2022 9:45 AM

Abstract

Deaths in a company’s board of directors, particularly exogenous, have a significant impact on the company’s success; their valuation is often strongly dependent on its leaders. Guided by Dr.Carola Frydman at Northwestern University’s Kellogg School of Management, this paper addresses questions such as whether age of death, personal incentive, and expectations impact

the extent to which businesses are affected by deaths of directors, what features characterize an ideal director, and who the most influential directors of the 1960s were. To conduct our experiments, we scanned historical records from the 1960s sourced from newspaper obituaries by utilizing a software called ABBYY14, and then performed analyses on the abnormal stock returns (AR) up to six days after the exogenous deaths of directors by utilizing Microsoft Excel. Generally, the deaths of “good” directors lower the company value as the company was highly dependent on them for their success, and deaths of “bad” directors maintain or increase the value because of either their lack of a role or detrimental role in the company. Assuming this, this paper strives to identify which traits are most desirable within the ideal director and create a model from which future leaders may be selected.

Share

COinS
 
Apr 20th, 9:30 AM Apr 20th, 9:45 AM

An Analysis of The Exogenous Deaths of Directors During The 1960s and Their Implications

Deaths in a company’s board of directors, particularly exogenous, have a significant impact on the company’s success; their valuation is often strongly dependent on its leaders. Guided by Dr.Carola Frydman at Northwestern University’s Kellogg School of Management, this paper addresses questions such as whether age of death, personal incentive, and expectations impact

the extent to which businesses are affected by deaths of directors, what features characterize an ideal director, and who the most influential directors of the 1960s were. To conduct our experiments, we scanned historical records from the 1960s sourced from newspaper obituaries by utilizing a software called ABBYY14, and then performed analyses on the abnormal stock returns (AR) up to six days after the exogenous deaths of directors by utilizing Microsoft Excel. Generally, the deaths of “good” directors lower the company value as the company was highly dependent on them for their success, and deaths of “bad” directors maintain or increase the value because of either their lack of a role or detrimental role in the company. Assuming this, this paper strives to identify which traits are most desirable within the ideal director and create a model from which future leaders may be selected.