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Beyond Independence: CEO Influence and the Internal Operations of the Board

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  • Derek Horstmeyer

    (School of Business, George Mason University, 4400 University Drive Fairfax, VA 22030, USA)

Abstract

Using a detailed dataset on the meeting sub-structure of the board, this paper investigates the time trends and cross-sectional determinants of internal boardroom control. First, I document that the principal governance reform following Sarbanes–Oxley was the removal of the CEO as a participating member in board monitoring and investment decisions. Consistent with this being against the preferences of the average CEO, I find that CEO power is negatively related to monitoring work handled outside of the CEO’s presence and positively related to board-time spent in the executive committee. Together the results highlight internal operations as governance concerns of the modern board.

Suggested Citation

  • Derek Horstmeyer, 2019. "Beyond Independence: CEO Influence and the Internal Operations of the Board," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-40, June.
    • Handle: RePEc:wsi:qjfxxx:v:09:y:2019:i:02:n:s201013921950006x
    DOI: 10.1142/S201013921950006X
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    References listed on IDEAS

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    1. Datta, Deepak K. & Basuil, Dynah A. & Agarwal, Ankita, 2020. "Effects of board characteristics on post-acquisition performance: A study of cross-border acquisitions by firms in the manufacturing sector," International Business Review, Elsevier, vol. 29(3).

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