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Full-Text Articles in Finance and Financial Management
Independent Directors' Dissensions And Firm Value, Wonseok Choi, Monika K. Rabarison, Bin Wang
Independent Directors' Dissensions And Firm Value, Wonseok Choi, Monika K. Rabarison, Bin Wang
Finance Faculty Research and Publications
Using a novel dataset of independent directors’ voting activities on items proposed by managers of Korean firms, we investigate whether independent directors’ dissension in board meetings plays an effective role in enhancing firm value through improved corporate governance. Our results indicate that dissension improves firm value. This finding is robust to different measures of firm value and alternative model specifications including subsample, propensity score matching, and instrumental variable analyses. Overall, we contribute to the understanding of the relation between corporate governance and firm value. Specifically, we provide new evidence that the monitoring by independent directors enhances firm value.
The Discretionary Effect Of Ceos And Board Chairs On Corporate Governance Structures, Matteo P. Arena, Marcus V. Braga-Alves
The Discretionary Effect Of Ceos And Board Chairs On Corporate Governance Structures, Matteo P. Arena, Marcus V. Braga-Alves
Finance Faculty Research and Publications
In this study we analyze the effect of latent managerial characteristics on corporate governance. We find that CEO and board chair fixed effects explain a significant portion of the variation in board size, board independence, and CEO-chair duality even after controlling for several firm characteristics and firm fixed effects. The effect of CEOs on corporate governance practices is attributable mainly to executives who simultaneously hold the position of CEO and board chair in the same firm. Our results do not show a decline in CEO discretionary influence on corporate governance after the enactment of the Sarbanes–Oxley Act and stock exchange …
When Managers Bypass Shareholder Approval Of Board Appointments: Evidence From The Private Security Market, Matteo Arena, Stephen P. Ferris
When Managers Bypass Shareholder Approval Of Board Appointments: Evidence From The Private Security Market, Matteo Arena, Stephen P. Ferris
Finance Faculty Research and Publications
This paper investigates the influence of managerial entrenchment on private placements by examining the firm's decision to appoint representatives of the private investors to the board without shareholder approval. By analyzing a sample of U.S. firms that appoint directors in combination with private offerings between 1995 and 2000, we find that firms with greater managerial entrenchment are more likely to bypass shareholder approval. Firms that bypass shareholders are less likely to appoint independent directors or to elect one of these directors as chairman. We also show that the market reacts more positively to the private offering announcement when the firm …