Information control, career concerns, and corporate governance

• 成果类型: Article
• 署名作者: Song, Fenghua; Thakor, Anjan V.
• 署名单位: Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2006.00891.x
• 发表日期: 2006
• 页码: 1845-1896
• 关键词: compensation; reputation; OWNERSHIP; COSTS; firm

摘要

We examine corporate governance effectiveness when the CEO generates project ideas and the board of directors screens these ideas for approval. However, the precision of the board's screening information is controlled by the CEO. Moreover, both the CEO and the board have career concerns that interact. The board's career concerns cause it to distort its investment recommendation procyclically, whereas the CEO's career concerns cause her to sometimes reduce the precision of the board's information. Moreover, the CEO sometimes prefers a less able board, and this happens only during economic upturns, suggesting that corporate governance will be weaker during economic upturns.