Board Structure and Monitoring: New Evidence from CEO Turnovers

A-Tier
Journal: The Review of Financial Studies
Year: 2015
Volume: 28
Issue: 10
Pages: 2770-2811

Authors (2)

Lixiong Guo (not in RePEc) Ronald W. Masulis (UNSW Sydney)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We use the 2003 NYSE and NASDAQ listing rules for board and committee independence as a quasinatural experiment to examine the causal relations between board structure and CEO monitoring. Noncompliant firms forced to raise board independence or adopt a fully independent nominating committee significantly increased their forced CEO turnover sensitivity to performance relative to compliant firms. Nominating committee independence is important even when firms had an independent board, and the effect is stronger when the CEO is on the committee. We conclude that greater board independence and full independence of nominating committees lead to more rigorous CEO monitoring and discipline.

Technical Details

RePEc Handle
repec:oup:rfinst:v:28:y:2015:i:10:p:2770-2811.
Journal Field
Finance
Author Count
2
Added to Database
2026-01-25