# Disentangling Director Attributes: Human Capital versus Social Capital of Directors
## 4 Empirical Findings  
_Univariate Analysis_  
We first examine the relationship between social capital and human capital by comparing differences in the average human capital of the top and bottom 25% of directors each year based on their aggregate connectivity score (AGG). We tested for significance in the differences using a \(t\)-test and reported the results in Table 3. The results show significant differences in the human capital attributes of the most and least connected directors. Specifically, high-connectivity directors are older than low-connectivity directors, 56.9 vs. 55.6 years old, are more likely to have a tertiary qualification, 75% vs. 66%, and are more likely to have prior experience as a CEO, but less likely to be a current CEO. This finding regarding CEOs is consistent with [PERSON] and [PERSON] (2011) who find that CEOs are highly sought after for board positions, but find that the time commitments of the CEO role limits their contribution as a director. High-connectivity directors also sit on more boards, 1.72 vs. 1.02. We also observe a marked difference in director experience with a much higher average number of years on boards for high-connectivity directors, 7 vs. 5.6 years. The number of M&A deals a highly connected director has been involved with is on average, at least three times that of a low connectivity director. Low-connectivity directors are also more likely to be directors of smaller firms, with only 11% sitting on an NZX50 company, and zero on an NZX10 company. Interestingly, 10% of high-connectivity directors are women, which is 3% higher compared to low-connectivity directors, potentially signalling that female directors are more likely to sit on boards with more connections, or that they generally sit on multiple boards. Looking at professional careers, high-connectivity directors are more likely to be accountants, financial experts, and professional directors (who hold on average 1.6 board seats). The high connectivity of professional directors is consistent with these directors typically being retired and therefore having the time to sit on multiple boards. High \begin{table}
\begin{tabular}{c c c c c c c c c} \hline  & **AGG** & **DEG** & **CLO** & **BET** & **EIG** & **HCI** & **FEM** & **NZ** \\ \hline DEG & 0.90 & & & & & & & \\ CLO & 0.67 & 0.46 & & & & & & \\ BET & 0.78 & 0.69 & 0.31 & & & & & \\ EIG & 0.60 & 0.44 & 0.27 & 0.20 & & & & \\ HCI & 0.30 & 0.32 & 0.21 & 0.25 & 0.06 & & & \\ FEM & 0.02 & 0.03 & 0.01 & 0.02 & 0.00 & 0.00 & & \\ NZ & 0.07 & \(-\)0.02 & 0.10 & 0.13 & 0.00 & \(-\)0.16 & \(-\)0.03 & \\ DIR & 0.69 & 0.72 & 0.30 & 0.76 & 0.16 & 0.28 & 0.02 & 0.16 \\ \hline \end{tabular}  
* This table reports Pearson pairwise correlations for the variables employed in the empirical analyses. Degree (_DEG_), closeness (_CLO_), betweenness (_BET_), and eigenvector (_EIG_) are the four social network analysis connectivity factors while _AGG_ is the PCA factor (_AGG_). _FEM_ is a dummy variable that equals 1 if a director is a woman, _NZ_ is a dummy if the director is domiciled in New Zealand, and _DIR_ is the number of current directorships the director holds at listed firms in NZ.  
\end{table} 
Table 2: Pearson pairwise correlations. connectivity directors are also more likely to have experience in a greater number of industries, 1.62 vs. 1.34. These results clearly suggest that certain human capital attributes of directors are related to their level of social capital. We next undertake univariate analysis of the relationship between _AGG_, the variable of interest, and _HCI_, which measures director human capital. The sample directors are ranked by their _AGG_ measure and then sorted into quartiles. In panel A of Table 4, we report the average estimates of _HCI_ and _DIR_ for each quartile. The first important result is that _HCI_ monotonically increases across the social capital quartiles.