Agency costs of multiple directorships: Toronto Stock Exchange - 2007-2008

This paper is a treatment of the agency costs to shareholders potentially caused by multiple directorships in firms listed on the Toronto Stock Exchange. The sample set is comprised of the compulsory annual reports as extracted from the OSIRIS database service by Bureau van Dijk Electronic Publishing. The data is limited to partial annual reports for 2007 and 2008 in order to capture the collapse in the financial sector in the United States. A score of workload is assigned to over 14,000 reported director positions. The position data is then tallied and cross-referenced to produce information on board workload within a firm and the total workload those directors face. The governance score, the difference between those workloads, is intended to capture director workload external to the board. This is compared to a definition of agency cost using a log regression. Weakness in the initial results created a desire to apply another analytical tool -- a comparison of averages using EViews. There appear to be effects of under-connected and over-connected boards of directors but the definition of agency cost seems to be insufficient. --P. ii.