A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
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Why Do Boards Exist? Governance Design in the Absence of Corporate Law
Resource type
Authors/contributors
- Burkart, Mike (Author)
- Miglietta, Salvatore (Author)
- Ostergaard, Charlotte (Author)
Title
Why Do Boards Exist? Governance Design in the Absence of Corporate Law
Abstract
We study under which circumstances firms choose to install boards and their roles in a historical setting in which neither boards nor their duties are mandated by law. Boards arise in firms with large, heterogeneous shareholder bases. We propose that an important role of boards is to mediate between heterogeneous shareholders with divergent interests. Voting restrictions are common and ensure that boards are representative and not captured by large blockholders. Boards are given significant powers to both mediate and monitor management, and these roles are intrinsically linked.
Publication
Review of Financial Studies
Volume
36
Issue
5
Pages
1788-1836
Date
2023
Citation
Burkart, M., Miglietta, S., & Ostergaard, C. (2023). Why Do Boards Exist? Governance Design in the Absence of Corporate Law. Review of Financial Studies, 36, 1788–1836.
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