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Communication in the boardroom

  • Adams, Renée

    ()

    (University of Queensland)

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.

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Paper provided by Institute for Financial Research in its series SIFR Research Report Series with number 61.

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Length: 48 pages
Date of creation: 15 Apr 2008
Date of revision:
Handle: RePEc:hhs:sifrwp:0061
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  1. Vafeas, Nikos, 1999. "Board meeting frequency and firm performance," Journal of Financial Economics, Elsevier, vol. 53(1), pages 113-142, July.
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  10. 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.
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  14. 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.
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