Celebrity Boards, Super Star CEO’s
The New York Times Dealbook today had a story entitled Handicapping the Investment of IAC in Chelsea Clinton by Steven M. Davidoff, former corporate lawyer who is a professor at Ohio State University.
Ms. Clinton, a one time management consultant at McKinsey and Company who also did a tour at a hedge fund run by a loyal Clinton donor has been appointed to the IAC board at the compelling fee of $300,000 per year.
Mr. Davidoff analyses what this could mean for IAC stock and references a recently released study by a quartet of professors entitled “Reaching for the Stars: The Appointment of Celebrities to Corporate Boards.
Dr’s. Stephen P. Ferris, Kenneth A. Kim, Takeshi Nishikawa and Emre Unlu examined 700 celebrities who served on corporate boards from 1985-2006. And they did indeed find a halo effect. The appointment of a celebrity increased the value of a company for as long as three years.
Since the study utilized data only until 2006, it is not clear whether this celebrity effect was significant during the financial meltdown and subsequent recession. It’s also not clear what happens if “celebrity” for some reason turns to “notoriety.”
Of interest would be a study that explores the record of home grown CEOs rather than an imported
superstar ones.
Tags: Chelsea Clinton, corporate boards, corporate executives, female executives, IAC, leadership, management, McKinsey and Company, New York Times
