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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," 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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