Journal of Financial Economics Vol. 112 No. 3 2014
Freedom of choice between unitary and two-tier boards: An empirical analysis
Abstract
We examine board structure in France, which since 1966 has allowed firms the freedom to choose between unitary and two-tier boards. We analyze how this choice relates to characteristics of the firm and its environment. Firms with severe asymmetric information tend to opt for unitary boards; firms with a potential for private benefits extraction tend to adopt two-tier boards. Chief executive officer turnover is more sensitive to performance at firms with two-tier boards, indicating greater monitoring. Our results are broadly consistent with the Adams and Ferreira (2007) model and suggest that gains result from allowing freedom of contract about board structure.
- DOI
- 10.1016/j.jfineco.2014.02.011
- Volume
- 112
- Issue
- 3
- Pages
- 364-385
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref