Many studies have investigated the relationship between human capital (intellectual capital and social capital in general) and the performance of firms. Few studies have examined the stock market reaction to announcements of the human capital of the Board of Directors (previous professional experience, age, educational level, relational network etc.).
What do you think?
We can call it the unemployment or vacant position rate. It require funds for the appointment of board of directors, which means a "CHANGE". any kind of such change will bring change in the stock market too. If we see the past stock market changes, when a specific person who has previously promoted positivism will raise the stock market during his/her speech whereas a negative person will make it go down. The personality surely matters.
Hi Fabrizio,
Yes i think that board diversity (gender and nationality) increases firm's performance (see Garcia-Meca, Garcia-Sanchez, Martinez-Ferrero's paper in JBF (2015)). Moreover directors with investment banking experience affect firm's acquisition behavior (see Huang, Jiang, Lie Yang (2015) JFE. At last foreign experience is valuable at least in China (see Giannetti, Liao, Yu (2015) JF forthcoming.
Yes, if he/she can change (make, affect) the decision of the firm's operation to affect the expectation of the future's earning.
Hi Fabrizio,
the Board track record and characteristics are of basic importance not only in determining results expectations (and therefore you should expect a reaction after any important announcement, evaluable on the stock market value of the Company shares) but also on the creditworthiness of the Company, if we talk of CEO,CFO roles!
In my experience, these considerations are facts, more then guesses and are strategic factors of paramount importance also when considering Companies.not quoted in the Stock Exchange.
Kind regards
Alberto
Yes. I think surely have a relationship between human capital of the Board of Directors and stock market reaction to new appointments. Please get literature review in Emerald Journal.
Dear Dr. Fabrizio,
There is a significant relationship between human capital and stock market. The stock market reacts (positively or negatively) to the new appointments of board members, depending on a number of factors, such as whether the new member is an insider (with stronger experience in the respective firm's operations but less independence) or outsider (with more independence but less familiarity with the firm's operations). In addiition to independence and expertise of the new member, competency is also taken into consideration by the stock market, as well as the composition of the board as a whole.
Dear Dr. Fabrizio,
I have come across papers that argue for board meetings frequency are reflective of active and quality of discussions among board members (an area of behavioral finance?) thereforth they tie to performance of stocks. May want to have a look at papers by Vafeas N. (1999) - Board meeting frequency and firm performance, Journal of Financial Economics 51, p. 113-142; Raghunandan (2007) - Determinants of Audit Committee Diligence - Accounting Horizon 21 (3); and Tong (2013) - A comparison of Chinese State owned firms' Boards- Proceedings 23 International Business research Conference, Melbourne 18 Nov 2013.
Best wishes
I am interested in studying the relationship between human capital and stock market reaction in a multicultural perspective. Board diversity, board experience, educational level, relational level, etc. Of course, the analysis involves the behaviour of the BoD and the decision-making process.
I am sure that a human capital that has highly ethical capital will have high correlation with the stock market. Unfortunately, I have not come across any studies on this matter.
Dear Fabrizio
You can download my conference paper via the link as following. It may be helpful.
https://www.researchgate.net/publication/280319175_QUALITY_OF_INTELLECTUAL_CAPITAL_DISCLOSURE
Mahmoud
What is Intellectual capital? - ResearchGate. Available from: https://www.researchgate.net/post/What_is_Intellectual_capital#55d72c925dbbbd12dc8b462c [accessed Aug 21, 2015].
Conference Paper QUALITY OF INTELLECTUAL CAPITAL DISCLOSURE
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