Research: Why Your Board Should Include a Long-Tenured Director

by Stefano Bonini, Luminita Enache, Mascia Ferrari, David Gaddis Ross and Kose John

December 11, 2024

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Summary.

Last year’s Silicon Valley Bank (SVB) default brought the topic of corporate board makeup and tenure to the fore. At SVB, five directors out of 12 had a tenure of less than three years, with three of them having served for less than 12 months at the time of the collapse. Seven directors had served 13 years or more, and no director had specific banking experience prior to the appointment of Thomas King just a few months before the default.

Stefano Bonini is associate professor of finance at Stevens Institute of Technology School of Business and a senior professor at SDA Bocconi University. He obtained his BA, MS, and PhD in Finance from Bocconi University and has been visiting scholar at Harvard University and MIT. His research focuses on the functioning and structure of public and private capital markets and has been published in top finance and management journals. He is currently co-editor of Venture Capital and associate editor of the Journal of Small Business Management and Strategic Change.

Luminita Enache is an associate professor of accounting at Haskayne School of Business, University of Calgary, and a visiting scholar at University of California, Berkeley. She investigates financial disclosures of new-economy firms, healthcare, intangibles, and corporate governance. Follow Luminita on LinkedIn.

Mascia Ferrari is a researcher at the University of Modena and Reggio Emilia. She has been visiting scholar at NYU Stern School of Business and Columbia University Business school. She obtained her PhD in accounting at the University of Florence. She is a CPA and an auditor. Her research is focused on corporate governance, ESG, international accounting, and intangibles.

David Gaddis Ross is the R. Perry Frankland Professor at the University of Florida’s Warrington College of Business Administration. His research examines the governance of firms, with a particular focus on gender issues in top management and the foundations of strategy. He received a PhD in economics from New York University’s Stern School of Business, an MBA from the University of Pennsylvania’s Wharton School of Business, and a BS in computer-science/mathematics and economics from Binghamton University.

Kose John is the Charles William Gerstenberg Professor of Banking and Finance at New York University, Stern School of Business. He holds a PhD from University of Florida. He has won several awards, including the Batterymarch Fellowship in 1983 and the Jensen Prize for the best paper published in 2000 in the Journal of Financial Economics. He has been on the Nomination Committee for the Nobel Prize in Economics from 2017 to the present.

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Research: Why Your Board Should Include a Long-Tenured Director

Summary.

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