File Download
There are no files associated with this item.
Links for fulltext
(May Require Subscription)
- Publisher Website: 10.2308/accr-52210
- Scopus: eid_2-s2.0-85064253229
- WOS: WOS:000464110800001
- Find via
Supplementary
- Citations:
- Appears in Collections:
Article: Biased boards
| Title | Biased boards |
|---|---|
| Authors | |
| Keywords | Executive compensation Managerial power view Boards of directors Cheap talk Friendly boards |
| Issue Date | 2019 |
| Citation | Accounting Review, 2019, v. 94, n. 2, p. 1-27 How to Cite? |
| Abstract | © 2019 American Accounting Association. All rights reserved. We study a corporate board tasked with monitoring a firm’s CEO and providing incrementally decision-relevant information. The board has both compensation and non-pecuniary incentives—we label the latter board bias. Friendly boards have muted information gathering incentives, but can more effectively engage in cheap talk communication with management. As a result, the direction of the optimal board bias is determined by the CEO’s initial information advantage: the board should be weakly friendly if the CEO is endowed with precise information, and weakly antagonistic (to the CEO) otherwise. Aside from assembling a friendly board, another way for shareholders to foster CEO/board communication is by granting the CEO more equity. In general, we find board friendliness and CEO equity grants to be positively associated, in equilibrium. This provides an optimal contracting rationale for an empirical regularity often interpreted as friendly boards facilitating rent extraction. |
| Persistent Identifier | http://hdl.handle.net/10722/276643 |
| ISSN | 2021 Impact Factor: 5.182 2020 SCImago Journal Rankings: 5.678 |
| ISI Accession Number ID |
| DC Field | Value | Language |
|---|---|---|
| dc.contributor.author | Baldenius, Tim | - |
| dc.contributor.author | Meng, Xiaojing | - |
| dc.contributor.author | Qiu, Lin | - |
| dc.date.accessioned | 2019-09-18T08:34:13Z | - |
| dc.date.available | 2019-09-18T08:34:13Z | - |
| dc.date.issued | 2019 | - |
| dc.identifier.citation | Accounting Review, 2019, v. 94, n. 2, p. 1-27 | - |
| dc.identifier.issn | 0001-4826 | - |
| dc.identifier.uri | http://hdl.handle.net/10722/276643 | - |
| dc.description.abstract | © 2019 American Accounting Association. All rights reserved. We study a corporate board tasked with monitoring a firm’s CEO and providing incrementally decision-relevant information. The board has both compensation and non-pecuniary incentives—we label the latter board bias. Friendly boards have muted information gathering incentives, but can more effectively engage in cheap talk communication with management. As a result, the direction of the optimal board bias is determined by the CEO’s initial information advantage: the board should be weakly friendly if the CEO is endowed with precise information, and weakly antagonistic (to the CEO) otherwise. Aside from assembling a friendly board, another way for shareholders to foster CEO/board communication is by granting the CEO more equity. In general, we find board friendliness and CEO equity grants to be positively associated, in equilibrium. This provides an optimal contracting rationale for an empirical regularity often interpreted as friendly boards facilitating rent extraction. | - |
| dc.language | eng | - |
| dc.relation.ispartof | Accounting Review | - |
| dc.subject | Executive compensation | - |
| dc.subject | Managerial power view | - |
| dc.subject | Boards of directors | - |
| dc.subject | Cheap talk | - |
| dc.subject | Friendly boards | - |
| dc.title | Biased boards | - |
| dc.type | Article | - |
| dc.description.nature | link_to_subscribed_fulltext | - |
| dc.identifier.doi | 10.2308/accr-52210 | - |
| dc.identifier.scopus | eid_2-s2.0-85064253229 | - |
| dc.identifier.volume | 94 | - |
| dc.identifier.issue | 2 | - |
| dc.identifier.spage | 1 | - |
| dc.identifier.epage | 27 | - |
| dc.identifier.isi | WOS:000464110800001 | - |
| dc.identifier.issnl | 0001-4826 | - |