IDEAS home Printed from https://ideas.repec.org/a/oup/rfinst/v22y2009i2p715-747.html
   My bibliography  Save this article

Consensus in Diverse Corporate Boards

Author

Listed:
  • Nina Baranchuk
  • Philip H. Dybvig

Abstract

Many directors are not simply insiders or outsiders. For example, an officer of a supplier is neither independent nor captive of management. We use a spatial model of board decision-making to analyze bargaining among multiple types of directors. Board decisions are modeled using a new solution concept called consensus. We use consensus to show that the information a new director brings is more important than the new director's impact on bargaining when the board is large and not too diverse. Our model suggests broadening the regulatory definition of independence and requiring a supermajority of outsiders. It also cautions that strong penalties, such as those imposed by Sarbanes-Oxley erode incentives when board performance is difficult to measure. The Author 2008. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.

Suggested Citation

  • Nina Baranchuk & Philip H. Dybvig, 2009. "Consensus in Diverse Corporate Boards," The Review of Financial Studies, Society for Financial Studies, vol. 22(2), pages 715-747, February.
    • Handle: RePEc:oup:rfinst:v:22:y:2009:i:2:p:715-747
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/rfs/hhn052
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:rfinst:v:22:y:2009:i:2:p:715-747. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/sfsssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.