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Squared Away: Veterans on the Board of Directors

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Abstract

Given the vital importance of the board of directors, firms seek to staff their boards with competent individuals who bring valuable skills and expertise to assist a firm. Especially following crises, firms should be interested in appointing directors who possess not only superior decision-making skills under pressure, but who also may be inclined to behave more ethically to prevent future breaches of stakeholder trust. Applying a social identity perspective, we argue that directors with U.S. military experience are decidedly valuable to firms because of their human capital. Using a sample of 144 U.S. based, publicly-traded firms that experienced a Securities Class Action Lawsuit between 2002 and 2012, we test hypotheses predicting that following crises, firms are more likely to appoint directors with military experience. Our findings extend the social identity view of an individual from the self or how individuals view themselves to include how others may view them.

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Authors and Affiliations

  1. Department of Management, Vackar College of Business & Entrepreneurship, The University of Texas Rio Grande Valley, 1201 West University Drive, Edinburg, TX, 78539-2999, USA

    Joseph Simpson

  2. Department of Management, Beacom School of Business, University of South Dakota, 414 E. Clark Street, Vermillion, SD, 57069, USA

    Ana Marcie Sariol

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  1. Joseph Simpson
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  2. Ana Marcie Sariol
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Correspondence to Ana Marcie Sariol.

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Simpson, J., Sariol, A.M. Squared Away: Veterans on the Board of Directors. J Bus Ethics 160, 1035–1045 (2019). https://doi.org/10.1007/s10551-018-3907-1

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