Communication in the boardroom
Communication is at the core of good governance, yet, because of data constraints, research on boardroom communication is almost nonexistent. I examine communication in the boardroom using a survey of the entire population of directors and CEOs of publicly-traded firms in Sweden during 2006. The survey contained questions about information exchange, debate, the directors' relationship with management and directors' roles and was linked to firm and director characteristics. I received responses from 628 directors and CEOs representing all but 12.59% of publicly-traded firms. Amongst others the data suggests that a) directors vary in their perceptions of their roles and directors' roles affect their perceptions of communication, b) directors who agree more that they primarily monitor management consistently perceive that they contribute less to boardroom discussion than directors who agree that the CEO often asks them for advice, c) directors with a stronger personal relationship with management perceive their advisory role to be more important, and d) directors on larger boards perceive that they contribute less to boardroom discussions than directors on smaller boards. The results are robust to using Heckman selection techniques to address sample selection bias. Overall, the data suggest that monitoring alone may not be sufficient for good governance.
|Date of creation:||15 Apr 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Institute for Financial Research Drottninggatan 89, SE-113 60 Stockholm, Sweden|
Web page: http://www.sifr.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 1998.
"Corporate Ownership Around the World,"
NBER Working Papers
6625, National Bureau of Economic Research, Inc.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 1998. "Corporate Ownership Around the World," Harvard Institute of Economic Research Working Papers 1840, Harvard - Institute of Economic Research.
- Raheja, Charu G., 2005. "Determinants of Board Size and Composition: A Theory of Corporate Boards," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(02), pages 283-306, June.
- Brickley, James A. & Coles, Jeffrey L. & Jarrell, Gregg, 1997. "Leadership structure: Separating the CEO and Chairman of the Board," Journal of Corporate Finance, Elsevier, vol. 3(3), pages 189-220, June.
- Benjamin E. Hermalin & Michael S. Weisbach, 2001.
"Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature,"
NBER Working Papers
8161, National Bureau of Economic Research, Inc.
- Benjamin E. Hermalin & Michael S. Weisbach, 2003. "Boards of directors as an endogenously determined institution: a survey of the economic literature," Economic Policy Review, Federal Reserve Bank of New York, issue Apr, pages 7-26.
- Stephen P. Ferris & Murali Jagannathan & A. C. Pritchard, 2003. "Too Busy to Mind the Business? Monitoring by Directors with Multiple Board Appointments," Journal of Finance, American Finance Association, vol. 58(3), pages 1087-1112, 06.
- Benjamin E. Hermalin & Michael S. Weisbach, 1996.
"Endogenously Chosen Boards of Directors and Their Monitoring of the CEO,"
9602001, EconWPA, revised 09 Oct 1996.
- Hermalin, Benjamin E & Weisbach, Michael S, 1998. "Endogenously Chosen Boards of Directors and Their Monitoring of the CEO," American Economic Review, American Economic Association, vol. 88(1), pages 96-118, March.
- Benjamin E. Hermalin & Michael S. Weisbach, 1996. "Endogenously Chosen Boards of Directors and Their Monitoring of the CEO," Working Papers _004, University of California at Berkeley, Haas School of Business.
- Warther, Vincent A., 1998. "Board effectiveness and board dissent: A model of the board's relationship to management and shareholders," Journal of Corporate Finance, Elsevier, vol. 4(1), pages 53-70, March.
- Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
- Vafeas, Nikos, 1999. "Board meeting frequency and firm performance," Journal of Financial Economics, Elsevier, vol. 53(1), pages 113-142, July.
- Linck, James S. & Netter, Jeffry M. & Yang, Tina, 2008. "The determinants of board structure," Journal of Financial Economics, Elsevier, vol. 87(2), pages 308-328, February.
- Ravina, Enrichetta & Sapienza, Paola, 2007.
"What Do Independent Directors Know? Evidence from Their Trading,"
CEPR Discussion Papers
6046, C.E.P.R. Discussion Papers.
- Enrichetta Ravina & Paola Sapienza, 2010. "What Do Independent Directors Know? Evidence from Their Trading," NBER Chapters, in: Corporate Governance National Bureau of Economic Research, Inc.
- Enrichetta Ravina & Paola Sapienza, 2006. "What Do Independent Directors Know? Evidence from Their Trading," NBER Working Papers 12765, National Bureau of Economic Research, Inc.
- Renée B. Adams & Daniel Ferreira, 2007. "A Theory of Friendly Boards," Journal of Finance, American Finance Association, vol. 62(1), pages 217-250, 02.
- Andres Almazan & Javier Suarez, 2003. "Entrenchment and Severance Pay in Optimal Governance Structures," Journal of Finance, American Finance Association, vol. 58(2), pages 519-548, 04.
- Yermack, David, 1996. "Higher market valuation of companies with a small board of directors," Journal of Financial Economics, Elsevier, vol. 40(2), pages 185-211, February.
When requesting a correction, please mention this item's handle: RePEc:hhs:sifrwp:0061. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anki Helmer)
If references are entirely missing, you can add them using this form.