The Determinants of Corporate Board Size and Composition: An Empirical Analysis

Boone, Audra L.; Field, Laura Casares; Karpoff, Jonathan M.; Raheja, Charu G.

doi:10.2139/ssrn.605762

Cited by 348 publications

(473 citation statements)

References 56 publications

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“…***, **, * Significance at the 1, 5 and 10 % level entrenched CEOs with large equity stakes will try to increase their power by limiting appointments to the board. An alternative argument, suggested in Boone et al (2007), is that higher CEO ownership better aligns the interests of the CEO with the interests of shareholders, thus reducing the need for incurring the higher monitoring cost of a large board. In either case, we expect a negative relation between CEO stock ownership and board size.…”

Section: Control For Endogeneitymentioning

confidence: 99%

Board size and firm value: evidence from Australia

et al. 2015

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We study the effect of board size on firm value in Australia. Using a large sample of Australian firms over the period 2001-2011, we find strong evidence of a negative relationship. We show that firms with a large board are associated with CEO compensation that is sensitive to firm size, but not to firm performance. This incentive to accumulate assets is congruent with the fact that firms with a large board also exhibit lower operating performance and higher operating costs. Furthermore, we find that the effect of board size is stronger in small firms. This result might explain why earlier studies, which focused on large Australian firms, found board size to have little impact on firm value.

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Section: Control For Endogeneitymentioning

confidence: 99%

Board size and firm value: evidence from Australia

et al. 2015

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“…See, among others,Raheja (2005), Adams and Ferreira(2007),Boone et al (2007), andHarris and Raviv (2008).…”

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confidence: 99%

Vice or Virtue? The Impact of Corporate Social Responsibility on Executive Compensation

2011

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We empirically examine the impact of corporate social responsibility (CSR) on CEO compensation using a large sample of the US firms from 1996 to 2010. We develop and test two hypotheses, the overinvestment hypothesis based on agency theory and the conflict-resolution hypothesis based on stakeholder theory. We find that the lag of CSR adversely affects both total compensation and cash compensation, after controlling for various firm and board characteristics. Our estimates show that an interquartile increase in CSR is followed by a 4.35% (2.78%) decrease in total (cash) compensation. We also find an inverse association between lagged employee relations and CEO compensation. Our results are robust to the correction for endogeneity using instrumental variable approach. Taken together, our results support the conflictresolution hypothesis, but not the CSR overinvestment argument.

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“…5 Recent work byBoone et al (2007),Coles et al (2008), andLinck et al (2008) argue that the optimal board size should depend on firm-specific characteristics, such as firm size, age, and complexity of business. 6 Taiwanese law requires directors of listed firms to disclose their stocks collateralized in banks.…”

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confidence: 99%

Founding Family Firms and Bank Loan Contracts

Yen¹,

Lin²,

Chen

et al. 2014

J Financ Serv Res

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Given the economic importance of bank loan financing worldwide, we empirically investigate the role of founding family ownership in bank loan contracts after controlling other governance practices via individual bank loan contracts in Taiwan. We first find that founding family firms can enjoy favorable loan contracts in terms of loan spread. Second, we find that these favors tend to decrease or even disappear when founding families are more likely to expropriate other investors or when the information asymmetry between the borrower and the bank is not severe. Third, we document that the favorable spread effect of founding family firms enlarge for firms with greater credit risk, or during periods of financial crisis.

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The Determinants of Corporate Board Size and Composition: An Empirical Analysis

Cited by 348 publications

References 56 publications

Board size and firm value: evidence from Australia

Board size and firm value: evidence from Australia

Vice or Virtue? The Impact of Corporate Social Responsibility on Executive Compensation

Founding Family Firms and Bank Loan Contracts

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