Recent surveys indicate that industry expertise is the most sought-after director qualification. Yet evidence on the value of such expertise is limited. This paper shows that firms that are difficult for non-experts to monitor and advise are more likely to appoint industry expert directors. Such...

We propose a measure of the advising capacity of corporate boards that focuses on the distribution of committee assignments. We then study the characteristics and impact of directors dedicated to providing strategic counsel to top management. We find that advisory directors possess professional...