Landier, Augustin, Sauvagnat, Julien
, Sraer, David
and Thesmar, David
(2013)
Bottom-up Corporate Governance.
Review of Finance, 17 (1).
pp. 161-201.
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Abstract
This article empirically relates the internal organization of a firm with decision making quality and corporate performance. We call “independent from the CEO” a top executive who joined the firm before the current CEO was appointed. In a very robust way, firms with a smaller fraction of independent executives exhibit (1) a lower level of profitability and (2) lower shareholder returns following large acquisitions. These results are unaffected when we control for traditional governance measures such as board independence or other well-studied shareholder friendly provisions. One interpretation is that “independently minded” top ranking executives act as a counter-power imposing strong discipline on their CEO, even though they are formally under his authority.
Item Type: | Article |
---|---|
Language: | English |
Date: | 2013 |
Refereed: | Yes |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Site: | UT1 |
Date Deposited: | 09 Jul 2014 17:23 |
Last Modified: | 02 Apr 2021 15:47 |
OAI Identifier: | oai:tse-fr.eu:25611 |
URI: | https://publications.ut-capitole.fr/id/eprint/15218 |