Lead from the Front : Does Shareholder Interlock Board of Directors Create Value?

Using a sample of publicly listed firms from 2004 to 2018 in China, we find that the shareholder interlock directors, who jointly hold board positions both in the listed firm and their shareholding firms, can have a positive influence on the performance and governance of the listed firm. Our main findings survive a series of robustness tests, any potential endogeneity issues, alternative measures of governance quality. The results suggest that shareholder interlock directors bring extra resources to the focal firm, which assist corporate boards in effective decision-making and better regulate the behavior of the senior management team