Board incentives and board independence in dynamic agency

Arbeitspapier

Efficiency of the board structure is usually perceived as linked to a higher degree of monitoring. If monitoring improves performance measurement signals, on which a manager is compensated, it can be considered desirable from the manager's point of view. As a result, having a low degree of board independence (many insiders on the board) may incentivize the board to improve its monitoring technology. However, from a dynamic perspective board monitoring is not always desirable, since it can destroy the ex ante efficient trade-off between risk and incentives under the presence of renegotiation possibility. This provides predictions for an optimal board composition seen from a dynamic perspective.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Hannover Economic Papers (HEP) ; No. 567

Classification and Topics

• Classification: Wirtschaft ; Criteria for Decision-Making under Risk and Uncertainty ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Accounting
• Subject: Corporate governance ; Board composition ; Inside directors ; Board incentives

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Katolnik, Svetlana ; Kukec, Sandra K. ; Schöndube, Jens Robert
• Event: Veröffentlichung
• (who): Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät
• (where): Hannover
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/129283
• Last update: 10.03.2025, 11:45 AM CET