A Theory of Board Control and Size

Harris, Milton; Raviv, Artur

doi:10.1093/rfs/hhl030

Cited by 960 publications

(579 citation statements)

References 22 publications

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“…Inside directors, who are often executives of the firm, can facilitate effective decisionmaking because they are a valuable source of firm-specific information about constraints and opportunities (e.g., see Raheja, 2005;Harris and Raviv, 2008;and Adams, Hermalin, and Weisbach, 2009). As Jensen and Meckling (1990) discuss, the allocation of decision rights within an organization is a fundamental building block of organizational structure.…”

Section: The Role Of Information In Structuring Corporate Boardsmentioning

confidence: 99%

The role of information and financial reporting in corporate governance and debt contracting

Armstrong

Guay

Weber³

2010

Journal of Accounting and Economics

1,128

350

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Abstract:We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multi-period contracts among managers, directors, shareholders, and creditors.Keywords: financial accounting; corporate governance; board structure; contracting; executive compensation; debt contracts; informal contracts We thank the following for helpful comments and suggestions:

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Section: The Role Of Information In Structuring Corporate Boardsmentioning

confidence: 99%

The role of information and financial reporting in corporate governance and debt contracting

Armstrong

Guay

Weber³

2010

Journal of Accounting and Economics

1,128

350

View full text Add to dashboard Cite

show abstract

“…On one hand, previous literature (Klein 2002;Rosenstein & Wyatt 1997) argued that presence of Independent directors on board reduces the conflict of interest, increases the quality of monitoring and also improves the financial performance of the firm. On the other hand, several studies (Adams & Mehran 2005;Harris & Raviv 2008;Raheja 2005) believe that the effectiveness of supervision is not maintained by simply appointing more independent directors. The special nature of banks requires additional directors, particularly non-executives, should be endowed with the firm specific or specialized knowledge, abilities required monitoring, disciplining, and advising managers, thus enabling optimal decisions.…”

Section: Board Size and Performancementioning

confidence: 99%

“…Thus the study also examines the causal effect of board structure on firm performance. Several studies attempt to explain the causal effect of board structure on firm performance (Adams & Ferreira 2007;Harris & Raviv 2008;Hermalin & Weisbach 1998;Raheja 2005). However majority of the studies exclude banks or financial firms from their studies.…”

Section: Introductionmentioning

confidence: 99%

Board Characteristics and Firm Performance: Evidence from Banking Industry in India

Kaur

Vu²

2017

AJAG

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“…Yermack (1996) found an inverse relationship between board size and firm value. In contrast, Harris and Raviv's (2008) model of boards trades off additional monitoring services with free-riding predicting larger boards to provide optimal monitoring when managers' opportunities to consume private benefits are high. Hassan and Halbouni (2013) found that board size significantly influence the UAE accounting-based performance measure, while none of the governance variables significantly affect firms' market performance.…”

Section: Board Sizementioning

confidence: 99%

Study on theories and mechanisms of corporate governance

Mishra

Kapil

2017

IJAAPE

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This paper aims to review the theories of corporate governance for understanding the theoretical basis of corporate governance mechanisms. Major theoretical studies on corporate governance, including studies done in emerging economies, are included in the review. The paper looks at corporate governance theories from value creation point of view. It is observed that the two perspectives of corporate governance, i.e., shareholder and stakeholder perspectives, are not in contrast to each other but are pointing towards the same goal, i.e., value creation. However, one points towards value creation for shareholders and the other points towards creation of societal value. While reviewing theoretical underpinnings and assumptions for corporate governance perspectives, due consideration has been given to the development of corporate governance mechanism based on various existing theories. A theoretical framework for understanding the relationship between corporate governance mechanism and corporate performance has been proposed. Emerging challenges for corporate governance theories have also been indicated. This being a review paper, one of the major limitations is an unintentional omission of some literature because of non-availability or non-reachability. Literature that would have been present in languages other than English could also not been included in the review.

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A Theory of Board Control and Size

Cited by 960 publications

References 22 publications

The role of information and financial reporting in corporate governance and debt contracting

The role of information and financial reporting in corporate governance and debt contracting

Board Characteristics and Firm Performance: Evidence from Banking Industry in India

Study on theories and mechanisms of corporate governance

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