A Theory of Corporate Boards and Forced CEO Turnover

• 成果类型: Article
• 署名作者: Chemmanur, Thomas J.; Fedaseyeu, Viktar
• 署名单位: Boston College; Bocconi University; Bocconi University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2762
• 发表日期: 2018
• 页码: 4798-4817
• 关键词: CEO TURNOVER; Board of directors; board member discussions; corporate governance

摘要

We model a corporate board evaluating a chief executive officer (CEO) of uncertain management ability. Each director receives a noisy private signal about CEO ability, after which directors discuss this ability and vote to retain or replace the CEO. Directors care about true CEO ability, since it affects their equity holding values; however, a CEO may impose costs of dissent on a director who votes to fire but fails to oust her. We relate the equilibrium CEO firing decision to board size, board composition, the effect of an imprecise public signal, and the cost and probability of finding a good replacement CEO.