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Board independence and a shareholder's commitment

Author

Listed:
  • Masanori Orihara

    (Waseda University)

Abstract

Our model shows that it is optimal for shareholders to choose boards of directors whose preferences do not align with those of the shareholders. Such a board composition works as the shareholders' commitment to providing an incentive for risk-averse CEOs.

Suggested Citation

  • Masanori Orihara, 2017. "Board independence and a shareholder's commitment," Economics Bulletin, AccessEcon, vol. 37(2), pages 846-852.
    • Handle: RePEc:ebl:ecbull:eb-16-00663
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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I2-P75.pdf
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    References listed on IDEAS

    as
    1. Renee B. Adams & Benjamin E. Hermalin & Michael S. Weisbach, 2010. "The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 58-107, March.
    2. Praveen Kumar, 2008. "Who Monitors the Monitor? The Effect of Board Independence on Executive Compensation and Firm Value," The Review of Financial Studies, Society for Financial Studies, vol. 21(3), pages 1371-1401, May.
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    Cited by:

    1. Ramzi Benkraiem & Amal Hamrouni & Anthony Miloudi & Ali Uyar, 2018. "Access to Finance for French Firms: Do boardroom attributes matter?," Economics Bulletin, AccessEcon, vol. 38(3), pages 1267-1278.

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    More about this item

    Keywords

    board of directors; commitment; contract enforceability;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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