Whoever hires John Boehner post-Congress will make a terrible investmentQuicklink submitted By Rob Kall Permalink
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Politicians routinely snag lucrative corporate jobs after their stints as public servants, but that historically has a negative impact on a company’s bottom line.
We looked at the hiring of politically connected directors – both members of the House of Lords, called Lords, and the House of Commons, called MPs – by British banks during the three decades before the first world war. We found that the appointment of connected directors – even high-profile MPs – did not increase shareholder value.
In fact, the appointment of MPs to directorships had a negative effect on bank equity returns. To make matters worse, bank equity took a hit when its directors were elected to parliament – there were no rules against that sort of double dipping back then – but did not suffer when directors lost elections, or even when they died while in office.