FACTORS AFFECTING THE NUMBER OF OUTSIDE DIRECTORSHIPS HELD BY CEOS

We investigate factors affecting the number of outside directorships h eld by CEOs. CEOs of firms with growth opportunities hold fewer outsid e directorships than CEOs of firms consisting primarily of assets-in-p lace. We find evidence consistent with CEOs holding more outside direc torships as they transfer decision rights to their eventual successors . We also find that when employees (not necessarily CEOs) of two diffe rent firms sit on each other's boards, CEOs hold more outside director ships, suggesting CEO participation bonds the relationship between the two firms. We find little evidence that outside directorships represe nt unchecked perquisite consumption on the part of CEOs.