Endogenously chosen boards of directors and their monitoring of the CEO

• 成果类型: Article
• 署名作者: Hermalin, BE; Weisbach, MS
• 署名单位: University of California System; University of California Berkeley; University of California System; University of California Berkeley; University of Arizona
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• 发表日期: 1998
• 页码: 96-118
• 关键词: firm performance; Ownership structure; turnover; governance; incentives; Managers; MARKET

摘要

How can boards be chosen through a process partially controlled by the CEO, yet, in many instances, still be effective monitors of him? We offer an answer based on a model in which board effectiveness is a function of its independence. This, in turn, is a function of negotiations (implicit or explicit) between existing directors and the CEO over who will fill vacancies on the board. The CEO's bargaining power over the board-selection process comes from his perceived ability relative to potential successors. Many empirical findings about board structure and performance arise as equilibrium phenomena of this model.