The extent to which a board of director's celebrity status affects the shareholder wealth maximization

This quantitative study examines the degree to which a board member's celebrity status affects shareholder wealth maximization. The study examines more closely the corporate governance effectiveness from the companies listed on the Standard & Poor's 500 index over a three year period 2004, 2005 and 2006. The analysis reveals three general findings. First, there is no statistically significant relationship between boards of directors with at least one celebrity director and a change in shareholders' wealth for boards of directors associated to companies listed on the S&P 500 index. Second, there is a statistically significant relationship between the level of a director's celebrity goodwill for boards of directors with one or more celebrity directors and an increase in shareholders' wealth for boards of directors associated with companies listed on the S&P 500 index. Finally, there is a statistically significant relationship between the number of a celebrity directors on a company's board of directors and a change in shareholders' wealth for boards of directors associated to companies listed on the S&P 500 index.