Separation of Ownership and Control: Implications for Board Composition

He, Enya; Sommer, David W.

doi:10.1111/j.1539-6975.2010.01351.x

Cited by 51 publications

(37 citation statements)

References 59 publications

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“…Stock insurers tend to have slightly smaller boards than mutual insurers. This result is consistent with findings in He and Sommer (2006).…”

Section: Summary Statistics and Empirical Resultssupporting

confidence: 94%

“…We also find stock insurers have a higher percentage of insiders (39.9 percent) than mutual insurers (21.2 percent). This result is consistent with the findings in Mayers, Shivdasani, and Smith (1997) and He and Sommer (2006). They also find mutual insurers tend to have higher percentages of outside directors than stock insurers.…”

Section: Summary Statistics and Empirical Resultssupporting

confidence: 91%

See 1 more Smart Citation

Organizational Structure, Board Composition, and Risk Taking in the U.S. Property Casualty Insurance Industry

Ho¹,

Lai²,

Lee³

2012

J of Risk & Insurance

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This study examines the impact of organizational structure and board composition on risk taking in the U.S. property casualty insurance industry, addressing different risk‐taking behaviors from different perspectives. The risk‐taking measures include total risk, underwriting risk, investment risk, and leverage risk. The evidence shows that mutual insurers have lower total risk, underwriting risk, and investment risk than stock insurers. In terms of board composition variables, we find that some board composition variables not only have impact on risk‐taking behaviors but also affect different risk measures differently. Thus, using different risk measures is better than using one risk measure to assess risk‐taking behavior. Finally, we conclude that an insurer can control its total risk through management of underwriting, investment, and leverage risks that determine an insurer's risk profile.

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“…Stock insurers tend to have slightly smaller boards than mutual insurers. This result is consistent with findings in He and Sommer (2006).…”

Section: Summary Statistics and Empirical Resultssupporting

confidence: 94%

Section: Summary Statistics and Empirical Resultssupporting

confidence: 91%

Organizational Structure, Board Composition, and Risk Taking in the U.S. Property Casualty Insurance Industry

Ho¹,

Lai²,

Lee³

2012

J of Risk & Insurance

View full text Add to dashboard Cite

show abstract

“…The role of board independence, with the share of independent or outside directors being an often used proxy has received extensive consideration in the existing insurance literature. More outside directors are employed by mutuals (compared to stock insurers; Mayers, Shivdasani, and Smith, 1997) and in firms with a higher degree of separation of ownership and control (He and Sommer, 2010). More outside directors are also related to higher executive pay for performance sensitivity (Mayers and Smith, 2010).…”

Section: Monitoringmentioning

confidence: 99%

Corporate Governance and Risk Taking: Evidence From the U.K. and German Insurance Markets

Eling¹,

Marek²

2013

J of Risk & Insurance

101

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We analyze the impact of factors related to corporate governance (i.e., compensation, monitoring, and ownership structure) on risk taking in the insurance industry. We measure asset, product, and financial risk in insurance companies and employ a structural equation model in which corporate governance is modeled as a latent factor. Based on this model, we present empirical evidence on the link between corporate governance and risk taking, considering insurers from two large European insurance markets. Higher levels of compensation, increased monitoring (more independent boards with more meetings), and more blockholders are associated with lower risk taking. Our empirical results provide justification for including factors related to corporate governance in insurance regulation.

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“…International literature on corporate governance has addressed the relationship between the ownership structure and the composition of the board of directors as alternative mechanisms of corporate control in listed firms (Li 1994;Bathala and Rao 1995;Denis and Sarin 1999;Mak and Li 2001;Bettinelli 2011;Peasnell et al 2003;Lasfer 2006;Boone et al 2007;Coles et al 2008;Linck et al 2008;He and Sommer 2010;Baglioni and Colombo 2013). Many of these studies have been carried out in an Anglo-Saxon context and have largely focused on the control function of the board over the managers of the firm.…”

Section: Introductionmentioning

confidence: 98%

Controlling shareholders and the composition of the board: special focus on family firms

Fraile

Fradejas

2014

Rev Manag Sci

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This article analyses the relevance of the agency problems that exist between shareholders and managers (type I agency problems) and between majority and minority shareholders (type II agency problems), in determining the composition of the board of directors, differentiating between family owned and non-family owned firms. The hypotheses are tested on a sample of 173 Spanish listed companies for the period 2004-2011. The results of our study indicate that, on one hand, as type I agency problems increase, firms increase their percentage of outside directors and, on the other, as type II agency problems increase, firms increase the ratio of independent to nominee directors. Whether the company is a family firm or not does moderate the influence of insider ownership over the composition of the board. Generally speaking, our findings support the view that firms configure their board of directors in such a way as to best signal to the market both efficient management and a balance of the interests of all shareholders. Likewise, these results could be taken into account when formulating recommendations on the composition of the board of directors.

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Separation of Ownership and Control: Implications for Board Composition

Cited by 51 publications

References 59 publications

Organizational Structure, Board Composition, and Risk Taking in the U.S. Property Casualty Insurance Industry

Organizational Structure, Board Composition, and Risk Taking in the U.S. Property Casualty Insurance Industry

Corporate Governance and Risk Taking: Evidence From the U.K. and German Insurance Markets

Controlling shareholders and the composition of the board: special focus on family firms

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