Board Reform Regulation and Cherry-Picking Directors

• In Event: Business Ethics and Corporate Governance

Abstract

This study examines how the endogenous mechanism that determines board structure is affected by the adoption of board independence regulations. Although being mandated to have a high-independent board uniformly, firms still try to tailor board structure to firm-level economic factors by choosing different board remodeling options. Empirical evidence shows how firms adapt themselves to a new environment and rebuild board structure accordingly.

Author

• Jonathan Sang-wook Nam, University of Minnesota-Twin Cities