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

Noe, Thomas (2001) Corporate board composition, protocols, and voting behavior: Experimental evidence. In: SAIF Behavioral Finance Conference, 3 September, 2001, Strathclyde, Scotland. (Unpublished)

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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: Conference or Workshop Item (Paper)
Keywords: Corporate governance; Implementation; Experimental economics; Mechanism design; finance
Subject(s): Finance
Date Deposited: 26 Feb 2012 21:14
Last Modified: 01 Mar 2017 10:51
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/2913

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