Investors' knowledge and interlocking directorship: the domino effect of media news on corporate performance

Owing to social structures that promote different types of connection, including investments and vertical relationships, boards of directors of international large companies often have some directors in sharing. Managing these complex relationships is very relevant both in terms of human resource management and knowledge management. Investors' knowledge usually is influenced by the news on interlocked directors affecting financial market trends. Using an event-study methodology, this paper aims to investigate whether newspaper articles (1999-2013) mentioning CEOs and Chairmen affiliated to multiple organisations influence the stock market prices of the companies where they are appointed. Results highlight that when the directors serve two different companies, they work as a transmission channel in influencing investors' knowledge and behaviour through media.