Journal article
Co-opted Boards
The Review of financial studies, v 27(6), pp 1751-1796
01 Jun 2014
Abstract
We develop two measures of board composition to investigate whether directors appointed by the CEO have allegiance to the CEO and decrease their monitoring. Co-option is the fraction of the board comprised of directors appointed after the CEO assumed office. As Co-option increases, board monitoring decreases: turnover-performance sensitivity diminishes, pay increases (without commensurate increase in pay-performance sensitivity), and investment increases. Non-Co-opted Independence-the fraction of directors who are independent and were appointed before the CEO-has more explanatory power for monitoring effectiveness than the conventional measure of board independence. Our results suggest that not all independent directors are effective monitors.
Metrics
Details
- Title
- Co-opted Boards
- Creators
- Jeffrey L. Coles - University of UtahNaveen D. Daniel - Drexel UniversityLalitha Naveen - Temple University
- Publication Details
- The Review of financial studies, v 27(6), pp 1751-1796
- Publisher
- Oxford Univ Press
- Number of pages
- 46
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000336410900004
- Scopus ID
- 2-s2.0-84900465781
- Other Identifier
- 991019167858704721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics