Well-connected directors: When do they really matter?

Abstract

A director in India serves on the boards of an average of five firms in a financial year. This number is higher if the director is female. Serving on boards of multiple organizations helps directors network with experts from different industries. It also leads to the formation of various indirect connections which can be utilized eventually. This article discusses the evolution of the role of directors, the rationale behind directors occupying multiple board positions, the benefits of better-connected directors, on both the individual and firm level, and the various factors which may limit the incremental benefits of well-connected directors.