Freedom of Choice between Unitary and Two-Tier Boards: An Empirical Analysis
Belot, François; Ginglinger, Edith; Slovin, Myron; Sushka, Marie (2014), Freedom of Choice between Unitary and Two-Tier Boards: An Empirical Analysis, Journal of Financial Economics, 112, 3, p. 364–385. http://dx.doi.org/10.1016/j.jfineco.2014.02.011
TypeArticle accepté pour publication ou publié
Journal nameJournal of Financial Economics
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Abstract (EN)We examine board structure in France, which since 1966 has allowed firms freedom to choose between unitary and two-tier boards. We analyze how this choice relates to characteristics of the firm and its environment. Firms with severe asymmetric information tend to opt for unitary boards; firms with a potential for private benefits extraction tend to adopt two-tier boards. There is enhanced sensitivity of CEO turnover to performance at firms with two-tier boards, indicating greater monitoring. Our results are broadly consistent with the Adams and Ferreira (2007) model and suggest there are gains from allowing freedom of contract about board structure.
Subjects / KeywordsUnitary board; Corporate governance; Two-tier board; Board of directors; Monitoring
Showing items related by title and author.
Reforming Corporate Governance: Evidence from the Choice between Unitary versus Dual Boards of Directors Belot, François; Ginglinger, Edith; Slovin, Myron; Sushka, Marie (2012) Communication / Conférence