Squared Away: Veterans on the Board of Directors

Given the vital importance of the board of directors, firms seek to staff their boards with competent individuals who bring valuable skills and expertise to assist a firm. Especially during crises, firms should be interested in appointing directors who possess superior decision-making skills under pressure, but who also may behave more ethically to prevent future breaches of stakeholder trust. We use a social identity perspective to argue that directors with military experience are highly valuable to firms because of their human capital. Using a sample of 144 U.S. based, publicly-traded firms that experienced a Securities Class Action Lawsuit between 2002 and 2012 we test hypotheses predicting that following crises, firms are more likely to appoint directors with military experience