An Analysis of the Effect of Management Participation in Director Selection on the Long-Term Performance of the Firm
Опубликовано на портале: 18-04-2007
Journal of Corporate Finance.
2003.
Vol. 9.
No. 2.
P. 169-181.
Тематический раздел:
A major criticism of corporate boards of directors is the absence of objectivity
in appraising and monitoring management [The Business Lawyer, 48 (1992) 59–77].
Recently, Shivdasani and Yermack [Journal of Finance LIV (5) (1999) 1829] find that
CEO involvement in board selection is associated with a greater proportion of gray
and a lower proportion of outside director appointments.
The question addressed here is whether corporate performance, as measured by Tobin’s
q, is affected by management influence in the board nominating process. Agrawal and
Knoeber [Journal of Financial and Quantitative Analysis, 31 (3) (1996) 377] find
interdependence among seven mechanisms to control agency problems between managers
and stockholders. Their finding suggests that cross-sectional OLS regressions of
firm performance on a single mechanism may be misleading and that interpretation
of multiple regression methods is weakened by multicollinearity. In this study,a
principal component analysis (PCA) is employed to mitigate such problems. An index
of management involvement in director nomination is constructed for a sample of 106
firms from 1989
to 1992 via a PCA method utilizing selected governance mechanisms within the nominating
process. We find a positive relationship between management participation in the
director selection process and corporate performance.
Ключевые слова
CEO корпоративная система корпоративное управление корпоративный менеджмент совет директоров структура менеджмента фирмы
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