The Costs of Entrenched Boards

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The Costs of Entrenched Boards

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dc.contributor.author Bebchuk, Lucian Arye
dc.contributor.author Cohen, Alma
dc.date.accessioned 2013-12-04T14:33:21Z
dc.date.issued 2005
dc.identifier.citation Lucian A. Bebchuk & Alma Cohen, The Costs of Entrenched Boards, 78 J. Fin. Econ. 409 (2005). en_US
dc.identifier.issn 0304-405X en_US
dc.identifier.uri http://nrs.harvard.edu/urn-3:HUL.InstRepos:11350501
dc.description.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). en_US
dc.language.iso en_US en_US
dc.publisher Elsevier en_US
dc.relation.isversionof http://www.sciencedirect.com/science/article/pii/S0304405X05001169# en_US
dc.relation.hasversion http://papers.ssrn.com/sol3/papers.cfm?abstract_id=556987 en_US
dc.relation.hasversion http://www.nber.org/papers/w10587 en_US
dc.relation.hasversion http://www.law.harvard.edu/faculty/bebchuk/pdfs/03.Bebchuk-Cohen.Entrenched-Boards.pdf en_US
dc.relation.hasversion http://www.law.harvard.edu/faculty/bebchuk/pdfs/Bebchuk-Cohen_Costs-of-Entrenched-Boards.pdf en_US
dash.license META_ONLY
dc.title The Costs of Entrenched Boards en_US
dc.type Journal Article en_US
dc.description.version Version of Record en_US
dc.relation.journal Journal of Financial Economics en_US
dash.depositing.author Bebchuk, Lucian Arye
dash.embargo.until 10000-01-01

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