The influence of board experience on firm performance: does the director's role matter?

This paper examines how company board characteristics (directors' quoted boards to date, quoted boards currently, board tenure and age) influence firm performance in a sample of Spanish listed companies for the period 2005-2015. Among the main contributions of the paper are that it analyses the boards of companies operating under a Continental, as opposed to Anglo-American, governance system characterized by high ownership concentration and low investor protection, and that it differentiates between inside and outside board members based on the role each type plays on the board. The results reveal differences between inside and outside board members in terms of the performance impact of some board characteristics. Thus, while for inside directors age has no significant effect on firm performance, for outsiders it has a negative one. Similarly, longer tenure on the board is associated with higher performance levels just in the case of outsiders, whereas we find a positive influence of directors' number of current board positions for insiders; finally, we do not find any evidence concerning the influence of board positions to date on performance for any of them.