EconPapers    
Economics at your fingertips  
 

Why Do Boards Exist? Governance Design in the Absence of Corporate Law

Mike Burkart (), Salvatore Miglietta and Charlotte Ostergaard ()

No 12147, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how owners trade off the costs and benefits of establishing a board in a historical setting, where boards are optional and authority over corporate decisions can be freely allocated across the general meeting, the board, and management. We find that informed owners and boards are substitutes, and that boards exist in firms most prone to collective action problems. Boards monitor, advise, and mediate among shareholders, and these different roles entail different allocations of authority. Boards also arise to balance the need for small shareholder protection with the need to curb managerial discretion.

Keywords: authority allocation; Boards; corporate governance; private contracting (search for similar items in EconPapers)
JEL-codes: D23 G3 K2 N80 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-law
Date: 2017-07
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12147 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12147

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=12147

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-10-04
Handle: RePEc:cpr:ceprdp:12147