The 2001 Recession, the Sarbanes-Oxley Act, and Director Characteristics

Abstract

This study examines how director characteristics like age, tenure, remaining tenure, total years, shares held, gender, and ethnicity changed during the run-up to the 2001 Recession as well as during the period that follows the Sarbanes-Oxley (i.e. SOX) Act. The study also examines how the professional affiliation of the directors to the firm had changed during this period. In addition to director characteristics, the paper also focuses on director independence. Has director independence improved after the SOX? Overall, what dimensions of director characteristics and independence improved? The study contributes to two separate streams of literature: the literature on crisis and CEO pay and the literature on CEO pay and firm performance. UDC: [005.322:316.46]:331.2; JEL: G30, G34