directorsbetween1989and2004.Thentheysimplycheckedwhichdirectorsstayedfromoneproxystatementtothenext.Themostlikelyreasonfordepartingaboardwasage,sotheresearchersconcentratedonthose“surprise”disappearancesbydirectorsundertheageof70.Theyfountthatafterasurprisedeparture,panywillsubsequentlyhavetorestateearningsincreasedbynearly20%.Thelikelihoodofbeingnamedinafederalclass-actionlawsuitalsoincreases,andthestockislikelytoperformworse.Theeffecttendedtobelargerforlargerfirms.Althoughacorrelationbetweenthemleavingandsubsequentbadperformanceatthefirmissuggestive,itdoesnotmeanthatsuchdirectorsarealwaysjumpingoffasinkingship.Oftenthey“tradeup.”Leavingriskier,smallerfirmsforlargerandmorestablefirms.Buttheresearchersbelievethatoutsidedirectorshaveaneasiertimeofavoidingablowtotheirreputationsiftheyleavea5
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