Two obvious trends in corporate governance include broadening board accountability beyond shareholders’ interests and paying outside directors with equity compensation (stock and stock options). By integrating common agency and instrumental stakeholder theories, we examine the effect of stock...

Using a sample of S&P 1500 firms between 1997 and 2000, this paper examines the effects of outside directors' stock-option compensation on firms' R&D intensity. Results suggest that including stock options in outside directors' compensation enhances firms' R&D. Moreover, stock-option...

In this paper, we develop an analytical model of outside directors' signaling role---a role that is especially important for entrepreneurial firms. We formally demonstrate that in the face of a market failure in which stakeholders refuse to align themselves with new firms, high-quality new...