Cai, JayNguyen, Tu2018-10-222018-10-222018-11-01https://dx.doi.org/10.1016/j.jbankfin.2018.09.012http://hdl.handle.net/10012/14048The final publication is available at Elsevier via https://dx.doi.org/10.1016/j.jbankfin.2018.09.012 © 2018. This manuscript version is made available under the CC-BY-NC-ND 4.0 license https://creativecommons.org/licenses/by-nc-nd/4.0/By examining board appointments of outside directors who have previously fired a CEO, we study how directors’ willingness to take disciplinary actions is related to a firm's performance and risk-taking. Such directors (‘disciplinary directors’) appear to benefit firms with weak monitoring, but hurt firms in innovative industries. Firms appointing a disciplinary director subsequently exhibit lower idiosyncratic risk, leverage, and R&D expense, make fewer acquisitions, and are more likely to replace poorly performing CEOs. Overall, disciplinary directors appear to influence managerial behavior and shareholder wealth.enAttribution-NonCommercial-NoDerivatives 4.0 InternationalBoard of directorsCEO turnoverDirector reputationDisciplinary effectsRisk-takingArticle