Joseph McCahery, Erik Vermeulen Understanding the Board of Directors after the Financial Crisis (01 Oct 2013) Available at ECGI: http://ecgi.global/working-paper/understanding-board-directors-after-financial-crisis
There are numerous studies on the effectiveness of boards that primarily focus on legal formalities, including gender diversity, board size, remuneration, board evaluation and the role of the chairman of the board.
While attempting to design a one-size-fits-all framework, scholars approaching board independence from an agency cost perspective have been less concerned with analyzing board structures that contribute to strategic decisionmaking and corporate performance. We examine the factors and board strategies that are associated with value creation and innovation by analyzing the composition of highperformance and high-growth companies. The paper shows that venture capitalists, with their specific expertise and experience, continue to play an important role as independent board members in the post-IPO period. We specifically investigate the importance of diversity, showing that there are significant differences between the companies in terms of age, gender diversity and business expertise (which is dependent on the stage in the company life-cycle).
This paper will be published as a chapter of the forthcoming volume ‘Directors & Officers Liability’ edited by Simon F. Deakin, Helmut Koziol, and Olaf Riss. It explores D&O liability from a law and economics perspective with a view to...Read more
By means of social network methodology, we analyze the labor market (turnover and appointments) of executive and non-executive directors. Directors with strong networks are able to obtain labor market information that generates opportunities and...Read more
Boards are crucial to shareholder wealth. Yet, little is known about how shareholder oversight affects director incentives. Using exogenous industry shocks to institutional investor portfolios, we find that...Read more
We derive conditions for when having a “busy” director on the board is harmful to shareholders and when it is beneficial. Our model allows directors to condition their monitoring choices on their codirectors’ choices and to experience positive or...Read more