The American Economic Review
Опубликовано на портале: 18-04-2007Benjamin E. Hermalin, Michael Steven Weisbach The American Economic Review. 1998. Vol. 88. No. 1. P. 96.
How can boards be chosen through a process partially controlled by the CEO, yet, in many instances, still be effective monitors of him? We offer an answer based on a model in which board effectiveness is a function of its independence. This, in turn, is a function of negotiations (implicit) between existing directors and the CEO over who will fill vacancies on the board. The CEO's bargaining power over the board-selection process comes from his perceived ability relative to potential successors. Many empirical findings about board structure and performance arise as equilibrium phenomena of this model.