New Evidence on the Market for Directors: Board Membership and Pennsylvania Senate Bill 1310


  • Jeffrey L. Coles,

  • Chun-Keung Hoi

  • * Jeff Coles is from Arizona State University, Tempe, Arizona, and Stan Hoi is from the Rochester Institute of Technology, Rochester, New York. The authors are grateful for helpful comments from James Ang, Mason Gerety, Marc Zenner, and participants of seminars at ASU and the 1999 FMA meeting. For their guidance, we are particularly indebted to an anonymous referee and Rick Green (the editor). Coles thanks the Dean' Council of 100 of the College of Business of Arizona State University for summer financial support. Hoi thanks the College of Business of Rochester Institute of Technology for FEAD grants and summer support.


We examine the relation between a board' decision to reject antitakeover provisions of Pennsylvania Senate Bill 1310 and subsequent labor market opportunities of those same board members. Compared to directors retaining all provisions, directors rejecting all protective provisions of SB1310 are three times as likely to gain additional external directorships and are 30 percent more likely to retain their internal slot on the board of that same Pennsylvania company. For external board seats, the results are driven by nonexecutive directors who are not members of the management team; for internal board seats, the results are driven by executive directors.