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Board independence and a shareholder's commitment

Masanori Orihara ()
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Masanori Orihara: Waseda University

Economics Bulletin, 2017, vol. 37, issue 2, 846-852

Abstract: Our model shows that it is optimal for shareholders to choose boards of directors whose preferences do not align with those of the shareholders. Such a board composition works as the shareholders' commitment to providing an incentive for risk-averse CEOs.

Keywords: board of directors; commitment; contract enforceability (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2017-04-22
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