Corporate board composition, protocols, and voting behavior: Experimental evidence

Gillette, Ann, Noe, Thomas and Rebello, Michael (2003) Corporate board composition, protocols, and voting behavior: Experimental evidence. The Journal of Finance, 58 (5). pp. 1997-2031.

Abstract

We examine voting by a board designed to mitigate conflicts of interest between privately informed insiders and owners. Our model demonstrates that, as argued by researchers and the business press, boards with a majority of trustworthy but uninformed "watchdog" agents can implement institutionally preferred policies. Our laboratory experiments strongly support this conclusion. Our model also highlights the necessity of penalties on insiders when there is dissension among board members. However, penalties for dissent appeared to have little impact on the experimental outcomes.

Item Type: Article
Keywords: corporate governance, implementation, experimental economics, mechanism design
Subject(s): Finance
Centre: Faculty of Finance
Date Deposited: 08 Nov 2011 12:55
Last Modified: 23 Oct 2015 14:06
URI: http://eureka.sbs.ox.ac.uk/id/eprint/1114

Actions (login required)

Edit View Edit View