DO INVESTORS TAKE DIRECTORS’ AGE, TENURE, AND THEIR HOMOGENEITY INTO ACCOUNT?
Anne Marie Gosselin
University of Sherbrooke
Parallel to studies on directors’ independence, the representation of women and
CEO/Chairman duality, this study is intended to examine whether investors take directors’ age and
tenure and age and tenure homogeneity into account.
Utilizing a sample of Canadian firms listed on the Toronto Stock Exchange for fiscal
years 2012 to 2015 inclusively, the result of this study show that investors take directors’ tenure
and tenure homogeneity into account, viewing tenure as a positive element, in contrast to tenure
heterogeneity, which they perceive as negative. They do not seem to consider directors’ age and
age heterogeneity to be relevant. In addition, our results point up the importance of further study to
understand the influence of directors’ tenure on firms’ financial performance and governance
practices before introducing any regulation to limit tenure terms.
Keywords: Corporate governance, director age, director tenure, value relevance, firm’s market value