The Costs of Entrenched Boards

DSpace/Manakin Repository

The Costs of Entrenched Boards

Citable link to this page


Title: The Costs of Entrenched Boards
Author: Bebchuk, Lucian Arye; Cohen, Alma

Note: Order does not necessarily reflect citation order of authors.

Citation: Lucian A. Bebchuk & Alma Cohen, The Costs of Entrenched Boards, 78 J. Fin. Econ. 409 (2005).
Access Status: Full text of the requested work is not available in DASH at this time (“dark deposit”). For more information on dark deposits, see our FAQ.
Full Text & Related Files:
Abstract: This paper investigates empirically how the value of publicly traded firms is affected by arrangements that protect management from removal. Staggered boards, which a majority of U.S. public companies have, substantially insulate boards from removal in either a hostile takeover or a proxy contest. We find that staggered boards are associated with an economically meaningful reduction in firm value (as measured by Tobin's Q). We also provide suggestive evidence that staggered boards bring about, and not merely reflect, an economically significant reduction in firm value. Finally, the correlation with reduced firm value is stronger for staggered boards that are established in the corporate charter (which shareholders cannot amend) than for staggered boards established in the company's bylaws (which shareholders can amend).
Published Version:
Other Sources:
Citable link to this page:
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)


Search DASH

Advanced Search