CEO-board dynamics

• 成果类型: Article
• 署名作者: Graham, John R.; Kim, Hyunseob; Leary, Mark
• 署名单位: Duke University; National Bureau of Economic Research; Cornell University; National Bureau of Economic Research; Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2020.04.007
• 发表日期: 2020
• 关键词: GOVERNANCE; Chief executive; Board of directors; dynamic contracting; bargaining; COMPENSATION; monitoring

摘要

We examine CEO-board dynamics using a new panel dataset that spans 1920 to 2011. The long sample allows us to perform within-firm and within-CEO tests over a long horizon, many for the first time in the governance literature. Consistent with theories of bargaining or dynamic contracting, we find board independence increases at CEO turnover and falls with CEO tenure, with the decline stronger following superior performance. CEOs are also more likely to be appointed board chair as tenure increases, and we find evidence consistent with a substitution between board independence and chair duality. Other results suggest that these classes of models fail to capture important elements of board dynamics. First, the magnitude of the CEO tenure effect is economically small, much smaller, for example, than the strong persistence in board structure that we show. Second, when external CEOs are hired, board independence falls and subsequently increases. Third, event studies show a positive market reaction when powerful CEOs die in office, consistent with powerful CEOs becoming entrenched. (C) 2020 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY license.