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Who's Monitoring the Monitor? Do Outside Directors Protect Shareholders' Interests?
- Source :
- Financial Review; May2005, Vol. 40 Issue 2, p155-172, 18p, 3 Charts
- Publication Year :
- 2005
-
Abstract
- The corporate governance literature is rich with empirical tests of the relation between board composition and firm performance. We consider the effect of board composition on a different measure of performance, the probability a firm will be sued by shareholders. We find firms that are defendants in securities litigation have higher proportions of insiders and of gray directors and have smaller boards than a matched group of firms that are not sued, even when controlling for firm value and industry. The results suggest that boards with higher proportions of outside directors do a better job of monitoring management. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 07328516
- Volume :
- 40
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Financial Review
- Publication Type :
- Academic Journal
- Accession number :
- 16792694
- Full Text :
- https://doi.org/10.1111/j.1540-6288.2005.00098.x