Disciplining and Screening Top Executives

Arbeitspapier

Boards of directors face the twin task of disciplining and screening executives. To perform these tasks directors do not have detailed information about executives' behaviour, and only infrequently have information about the success or failure of initiated strategies, reorganizations, mergers etc. We analyse the nature of (implicit) retention contracts boards use to discipline and screen executives. Consistent with empirical observation, we find that executives may become overly active to show their credentials; that the link between bad performance and dismissal is weak; and that boards occasionally dismiss competent executives.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 06-054/1

Classification and Topics

• Classification: Wirtschaft ; Corporate Finance and Governance: General ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
• Subject: board of directors ; turnover ; retention contracts ; selection ; moral hazard ; empire building

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Martinez, Silvia Dominguez ; Swank, Otto H. ; Visser, Bauke
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/86416
• Last update: 10.03.2025, 11:42 AM CET