Special Purpose Acquisition Company (“SPAC”) directors are compensated with economic ownership of founders shares, shares which have value if the SPAC combines with an operating business and which expire worthless if that does not occur. By analyzing the public filings of the 248 SPACs that IPOed in 2020, I create a dataset of SPAC director compensation, which is the first of its kind. I find that a director of the median SPAC receives approximately 30,000 founders shares (estimated value $300,000) and a director of the average SPAC receives approximately 40,000 founders shares (estimated value $400,000). I then demonstrate how the current director compensation subjects SPACs and their directors to greater litigation risk under Delaware law. Specifically, SPAC directors may not be considered independent under Delaware law because of the structure and quantum of compensation via founders shares. Furthermore, under Delaware law, if SPAC directors are not independent, legal claims surrounding the SPAC merger may be examined under the exacting entire fairness standard rather than the deferential business judgement rule because potential procedural safeguards of the SPAC, such as the shareholder vote, may not be sufficiently “cleansing.” Finally, I propose changes in SPAC director compensation to improve director independence.
{"title":"SPAC Attack: An Examination of SPAC Director Compensation and Its Legal Implications","authors":"Hunter Fortney","doi":"10.2139/ssrn.3911337","DOIUrl":"https://doi.org/10.2139/ssrn.3911337","url":null,"abstract":"Special Purpose Acquisition Company (“SPAC”) directors are compensated with economic ownership of founders shares, shares which have value if the SPAC combines with an operating business and which expire worthless if that does not occur. By analyzing the public filings of the 248 SPACs that IPOed in 2020, I create a dataset of SPAC director compensation, which is the first of its kind. I find that a director of the median SPAC receives approximately 30,000 founders shares (estimated value $300,000) and a director of the average SPAC receives approximately 40,000 founders shares (estimated value $400,000). I then demonstrate how the current director compensation subjects SPACs and their directors to greater litigation risk under Delaware law. Specifically, SPAC directors may not be considered independent under Delaware law because of the structure and quantum of compensation via founders shares. Furthermore, under Delaware law, if SPAC directors are not independent, legal claims surrounding the SPAC merger may be examined under the exacting entire fairness standard rather than the deferential business judgement rule because potential procedural safeguards of the SPAC, such as the shareholder vote, may not be sufficiently “cleansing.” Finally, I propose changes in SPAC director compensation to improve director independence.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131586181","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Eight studies (N = 5,025) demonstrate that consumers persist more when they must complete a target number of goal-related actions before receiving continuous rewards (i.e., what we term work-to-unlock rewards) than when they receive continuous rewards for their effort right away (i.e., what we term work-to-receive rewards). The authors suggest that the motivating power of work-to-unlock rewards arises because these rewards (1) naturally encourage consumers to set an attainable goal to start earning rewards, motivating consumers initially through goal setting and (2) keep consumers engaged after reaching this goal due to low perceived progress in earning rewards. A work-to-unlock reward structure increases persistence relative to standard continuous rewards across a variety of consumer relevant domains (e.g., exercising, flossing, evaluating products), and even when work-to-unlock rewards offer rewards of a lower magnitude. Further, a work-to-unlock reward structure outperforms other reward structures that encourage goal setting. Lastly, the authors identify a theoretically consistent boundary condition of this effect: the length of the unlocking period.
{"title":"Work-to-Unlock Rewards: Leveraging Goals in Reward Systems to Increase Consumer Persistence","authors":"Marissa A Sharif, Kaitlin Woolley","doi":"10.2139/ssrn.3853212","DOIUrl":"https://doi.org/10.2139/ssrn.3853212","url":null,"abstract":"\u0000 Eight studies (N = 5,025) demonstrate that consumers persist more when they must complete a target number of goal-related actions before receiving continuous rewards (i.e., what we term work-to-unlock rewards) than when they receive continuous rewards for their effort right away (i.e., what we term work-to-receive rewards). The authors suggest that the motivating power of work-to-unlock rewards arises because these rewards (1) naturally encourage consumers to set an attainable goal to start earning rewards, motivating consumers initially through goal setting and (2) keep consumers engaged after reaching this goal due to low perceived progress in earning rewards. A work-to-unlock reward structure increases persistence relative to standard continuous rewards across a variety of consumer relevant domains (e.g., exercising, flossing, evaluating products), and even when work-to-unlock rewards offer rewards of a lower magnitude. Further, a work-to-unlock reward structure outperforms other reward structures that encourage goal setting. Lastly, the authors identify a theoretically consistent boundary condition of this effect: the length of the unlocking period.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115661470","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Share buybacks reduce taxes, commit managers to pay out free cash-flow, and send positive signals to investors. This paper shows that they also transfer wealth from shareholders to the owners of employee stock options and that this transfer increases the price needed to induce shareholders to sell shares back to the firm. Two costs arise: at firms with poor governance, buybacks occur that harm shareholders; at firms with good governance, some value-enhancing buybacks do not occur. These costs are greatest when the number of outstanding options is large and when the options are out-of-the-money.
{"title":"The Dark Side of Share Buybacks","authors":"G. Guthrie","doi":"10.2139/ssrn.3022454","DOIUrl":"https://doi.org/10.2139/ssrn.3022454","url":null,"abstract":"Share buybacks reduce taxes, commit managers to pay out free cash-flow, and send positive signals to investors. This paper shows that they also transfer wealth from shareholders to the owners of employee stock options and that this transfer increases the price needed to induce shareholders to sell shares back to the firm. Two costs arise: at firms with poor governance, buybacks occur that harm shareholders; at firms with good governance, some value-enhancing buybacks do not occur. These costs are greatest when the number of outstanding options is large and when the options are out-of-the-money.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127669566","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Paolo Saona, Laura Muro, Ryan McWay, Mauricio Jara-Bertin
We analyze the effect board activity and board remuneration has on earnings management (EM). Our results show that more active boards are inefficient in preventing earnings manipulation. Regarding board compensation we find a U-shaped relation indicating that excessive remuneration will lead to more earnings management. Policy recommendations are derived from the findings.
{"title":"Contrasting Incentives for Earnings Management: Board Activity and Board Remuneration in Spanish Firms","authors":"Paolo Saona, Laura Muro, Ryan McWay, Mauricio Jara-Bertin","doi":"10.2139/ssrn.3710966","DOIUrl":"https://doi.org/10.2139/ssrn.3710966","url":null,"abstract":"We analyze the effect board activity and board remuneration has on earnings management (EM). Our results show that more active boards are inefficient in preventing earnings manipulation. Regarding board compensation we find a U-shaped relation indicating that excessive remuneration will lead to more earnings management. Policy recommendations are derived from the findings.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126147151","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
German Abstract: Als Reaktion auf die Finanzkrise hat der deutsche Gesetzgeber im Jahr 2009 das Gesetz zur Angemessenheit der Vorstandsvergütung (VorstAG) eingeführt. In diesem Paper wird analysiert, ob sich die vom Gesetzgeber intendierten Zielsetzungen durch das VorstAG erreichen lassen. Hierzu werden die neu aufgenommen Angemessenheitskriterien Leistung, Üblichkeit und Nachhaltigkeit und die gesetzlichen Vorgaben zur Vergütungsstruktur, nach der Vergütungssysteme zukünftig mehrjährige Bemessungsgrundlagen und Vergütungsbegrenzungen (Caps) aufweisen müssen, kritisch bewertet. Da alle DAX30-Unternehmen die Vorgaben zur Vergütungsstruktur umsetzen, ist aus ökonomischer Sicht die Frage zu beantworten, ob Vergütungssysteme mit mehrjährigen Bemessungsgrundlagen und Vergütungs-begrenzung (Cap) das Eingehen unverantwortlicher Risiken vermeiden können und tatsächlich Anreize zu einer nachhaltigen, langfristig orientierten Unternehmensführung setzen. Zur Beantwortung dieser Fragestellung werden zuerst Ausgestaltungsempfehlungen für Vergütungssysteme abgeleitet, die sich aus den grundlegenden Anforderungen an Vergütungssysteme und den modelltheoretischen Erkenntnissen der Prinzipal-Agenten-Theorie sowie der Prospect Theory zum Entscheidungs- und Risikoverhalten ableiten lassen. Die nachfolgende Analyse zeigt, dass die Regelungen des VorstAG aus ökonomischer Perspektive insgesamt kritisch zu beurteilen sind und erheblichen Interpretationsspielraum aufweisen, was die praktische Umsetzbarkeit erschwert. In den betrachteten Vergütungssystemen wer-den zahlreiche der hergeleiteten Ausgestaltungsempfehlungen berücksichtigt, allerdings resultiert aus der Verwendung mehrjähriger Bemessungsgrundlagen und Vergütungsbegrenzungen nicht automatisch der Anreiz zu einer langfristig orientierten Unternehmensführung. English Abstract: In reaction to the financial crisis German legislative authorities enacted “The Appropriateness of Executive Board Compensation Act (VorstAG)” in 2009. This paper focuses on the question whether the legislative objectives can be met with the VorstAG. For this purpose, the new legal regulation criteria performance, customariness of remuneration, and sustainability will be critically analyzed, as well as the statutory use of long-term compensation components and caps. It will be shown that compensation systems of all German DAX30 companies meet the legal regulations. This leads to the economic question if long-term compensation components and caps can contribute to a prevention of high-risk decisions, and thus incentivize the executive board towards a long-term orientated sustainable corporate management. Two steps are taken to answer this question. In a first step, recommendations for the design of executive compensation will be drawn from basic compensation design requirements and from (behavioral) economic theories, Principal-Agency-Theory and Prospect Theory. Based on this findings, the legislative objectives, the new legal r
{"title":"Vergütungssysteme für Vorstände – Eine Analyse mehrjähriger Bemessungsgrundlagen und Caps (The Design of Executive Compensation – An Analysis of Long-Term Compensation Components and Caps)","authors":"P. Michels","doi":"10.2139/ssrn.3220945","DOIUrl":"https://doi.org/10.2139/ssrn.3220945","url":null,"abstract":"<b>German Abstract:</b> Als Reaktion auf die Finanzkrise hat der deutsche Gesetzgeber im Jahr 2009 das Gesetz zur Angemessenheit der Vorstandsvergütung (VorstAG) eingeführt. In diesem Paper wird analysiert, ob sich die vom Gesetzgeber intendierten Zielsetzungen durch das VorstAG erreichen lassen. Hierzu werden die neu aufgenommen Angemessenheitskriterien Leistung, Üblichkeit und Nachhaltigkeit und die gesetzlichen Vorgaben zur Vergütungsstruktur, nach der Vergütungssysteme zukünftig mehrjährige Bemessungsgrundlagen und Vergütungsbegrenzungen (Caps) aufweisen müssen, kritisch bewertet. Da alle DAX30-Unternehmen die Vorgaben zur Vergütungsstruktur umsetzen, ist aus ökonomischer Sicht die Frage zu beantworten, ob Vergütungssysteme mit mehrjährigen Bemessungsgrundlagen und Vergütungs-begrenzung (Cap) das Eingehen unverantwortlicher Risiken vermeiden können und tatsächlich Anreize zu einer nachhaltigen, langfristig orientierten Unternehmensführung setzen. Zur Beantwortung dieser Fragestellung werden zuerst Ausgestaltungsempfehlungen für Vergütungssysteme abgeleitet, die sich aus den grundlegenden Anforderungen an Vergütungssysteme und den modelltheoretischen Erkenntnissen der Prinzipal-Agenten-Theorie sowie der Prospect Theory zum Entscheidungs- und Risikoverhalten ableiten lassen. Die nachfolgende Analyse zeigt, dass die Regelungen des VorstAG aus ökonomischer Perspektive insgesamt kritisch zu beurteilen sind und erheblichen Interpretationsspielraum aufweisen, was die praktische Umsetzbarkeit erschwert. In den betrachteten Vergütungssystemen wer-den zahlreiche der hergeleiteten Ausgestaltungsempfehlungen berücksichtigt, allerdings resultiert aus der Verwendung mehrjähriger Bemessungsgrundlagen und Vergütungsbegrenzungen nicht automatisch der Anreiz zu einer langfristig orientierten Unternehmensführung. <b>English Abstract:</b> In reaction to the financial crisis German legislative authorities enacted “The Appropriateness of Executive Board Compensation Act (VorstAG)” in 2009. This paper focuses on the question whether the legislative objectives can be met with the VorstAG. For this purpose, the new legal regulation criteria performance, customariness of remuneration, and sustainability will be critically analyzed, as well as the statutory use of long-term compensation components and caps. It will be shown that compensation systems of all German DAX30 companies meet the legal regulations. This leads to the economic question if long-term compensation components and caps can contribute to a prevention of high-risk decisions, and thus incentivize the executive board towards a long-term orientated sustainable corporate management. Two steps are taken to answer this question. In a first step, recommendations for the design of executive compensation will be drawn from basic compensation design requirements and from (behavioral) economic theories, Principal-Agency-Theory and Prospect Theory. Based on this findings, the legislative objectives, the new legal r","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129413494","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
At age 17, Adam Smith accepted a Snell Fellowship to Oxford, agreeing to be ordained as a minister of the Church of England. Smith did not fulfill this obligation. Instead, Oxford officials agreed to allow him to transfer from the Ordination to the civil law tract; and, later, to leave Oxford early on a “compassionate leave.” Undoubtedly, Smith's life and writings would have been considerably different had he adhered to the terms of the Fellowship. How did this agreement come about? Until recently, Smith's biographers have not attended to this issue. In his new book, Kennedy (2017) provides the answer. Balliol College at Oxford, which housed the Snell Fellows, captured a major portion of each Fellow’s scholarship. Were Smith to abandon Oxford, Balliol would lose the funds associated with Smith's Fellowship. Hence the college officials had an incentive to make an agreement with Smith in a manner that maintained the flow of funds. To do so, they had to make accommodations with Smith. The purpose of this note is to provide a simple game theoretic exposition of Kennedy’s answer. This approach highlights both the strategic setting facing the bargaining parties as well as the gains from exchange.
{"title":"How Adam Smith Negotiated Leave from Oxford: A Game-Theoretic Account","authors":"B. Weingast","doi":"10.2139/ssrn.3162425","DOIUrl":"https://doi.org/10.2139/ssrn.3162425","url":null,"abstract":"At age 17, Adam Smith accepted a Snell Fellowship to Oxford, agreeing to be ordained as a minister of the Church of England. Smith did not fulfill this obligation. Instead, Oxford officials agreed to allow him to transfer from the Ordination to the civil law tract; and, later, to leave Oxford early on a “compassionate leave.” Undoubtedly, Smith's life and writings would have been considerably different had he adhered to the terms of the Fellowship. How did this agreement come about? Until recently, Smith's biographers have not attended to this issue. In his new book, Kennedy (2017) provides the answer. Balliol College at Oxford, which housed the Snell Fellows, captured a major portion of each Fellow’s scholarship. Were Smith to abandon Oxford, Balliol would lose the funds associated with Smith's Fellowship. Hence the college officials had an incentive to make an agreement with Smith in a manner that maintained the flow of funds. To do so, they had to make accommodations with Smith. The purpose of this note is to provide a simple game theoretic exposition of Kennedy’s answer. This approach highlights both the strategic setting facing the bargaining parties as well as the gains from exchange.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129653293","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Gender diversity on company boards is becoming an increasingly important issue. The theoretical bases for the desirability of gender diversity regulations can be understood under three categories i.e. social benefits; business benefits; and corporate governance benefits. Since corporate governance is the main task of the board of directors, the corporate governance case for board gender diversity needs to be developed further. This article tests the corporate governance benefits of board gender diversity by conducting a qualitative content analysis of Delaware cases. The observations from this study are then analysed against the quantitative and qualitative literature on the about the corporate governance benefits of board gender diversity. The findings suggest that gender diversity might help boards overcome some impediments to effective functioning in certain cases but also suggests other complementary solutions to make boards more effective. The article thus, builds the corporate governance case for board gender diversity, but also sets out its limits.
{"title":"The Corporate Governance Case for Board Gender Diversity: Evidence from Delaware Cases","authors":"Akshaya Kamalnath","doi":"10.2139/ssrn.3128272","DOIUrl":"https://doi.org/10.2139/ssrn.3128272","url":null,"abstract":"Gender diversity on company boards is becoming an increasingly important issue. The theoretical bases for the desirability of gender diversity regulations can be understood under three categories i.e. social benefits; business benefits; and corporate governance benefits. Since corporate governance is the main task of the board of directors, the corporate governance case for board gender diversity needs to be developed further. This article tests the corporate governance benefits of board gender diversity by conducting a qualitative content analysis of Delaware cases. The observations from this study are then analysed against the quantitative and qualitative literature on the about the corporate governance benefits of board gender diversity. The findings suggest that gender diversity might help boards overcome some impediments to effective functioning in certain cases but also suggests other complementary solutions to make boards more effective. The article thus, builds the corporate governance case for board gender diversity, but also sets out its limits.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"13 2","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114028277","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Given the endogenous and contingent nature of firms’ governance choices, it is not surprising that the results of prior studies investigating the association between board attributes and firm performance are mixed. In this paper, we exploit the presence of an exogenous shock represented in the Egyptian revolution in 2011 to assess the effect of gender diversity in the board on firm performance. Our results show that gender diverse firms perform better when their environment becomes more complex and unpredictable. The presence of foreign directors on the other hand has the opposite effect. Our results challenge the notion that diversity attributes are additive, and underscore the benefits of gender diversity in more complex and unpredictable contexts. Overall, we provide evidence that board structure/diversity-performance relationship is contingent upon the social, political and economic context, and changes in response to external shocks.
{"title":"Boards’ Gender Diversity and Firm Performance Before and after the Egyptian Revolution","authors":"Melsa Ararat, Moataz El-Helaly, Nermeen Shehata","doi":"10.2139/ssrn.3063867","DOIUrl":"https://doi.org/10.2139/ssrn.3063867","url":null,"abstract":"Given the endogenous and contingent nature of firms’ governance choices, it is not surprising that the results of prior studies investigating the association between board attributes and firm performance are mixed. In this paper, we exploit the presence of an exogenous shock represented in the Egyptian revolution in 2011 to assess the effect of gender diversity in the board on firm performance. Our results show that gender diverse firms perform better when their environment becomes more complex and unpredictable. The presence of foreign directors on the other hand has the opposite effect. Our results challenge the notion that diversity attributes are additive, and underscore the benefits of gender diversity in more complex and unpredictable contexts. Overall, we provide evidence that board structure/diversity-performance relationship is contingent upon the social, political and economic context, and changes in response to external shocks.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122221313","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Previous research on women directors mostly explores the link between women directors and firm performance. The potential mediators explaining this link are largely under-researched. In our exploratory paper, we investigate women directors’ roles in interviews with female and male board members. In the perception of board members, women directors widen the board’s perspectives as unique experts, they objectify discussions, and they act as mediators. By giving first indications on when and how women directors fulfil these roles, our study contributes to the literature on why women directors are sometimes found to enhance firm performance and sometimes they are not.
{"title":"Women Directors' Roles on Corporate Boards: Insights from a Qualitative Study","authors":"J. Joecks, Kerstin Pull, Katrin Scharfenkamp","doi":"10.2139/ssrn.2962947","DOIUrl":"https://doi.org/10.2139/ssrn.2962947","url":null,"abstract":"Previous research on women directors mostly explores the link between women directors and firm performance. The potential mediators explaining this link are largely under-researched. In our exploratory paper, we investigate women directors’ roles in interviews with female and male board members. In the perception of board members, women directors widen the board’s perspectives as unique experts, they objectify discussions, and they act as mediators. By giving first indications on when and how women directors fulfil these roles, our study contributes to the literature on why women directors are sometimes found to enhance firm performance and sometimes they are not.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128512094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
By introducing a shareholder with many votes (a blockholder) to a standard model of voting, we uncover several striking results. First, if a blockholder is unbiased, she may not vote with all of her shares. This is efficient, as it prevents her vote from drowning out the information provided by other votes. Second, if this blockholder can announce her vote before the vote takes place, other shareholders may ignore their information and vote with the blockholder to support her superior information. Third, if the blockholder is biased, some shareholders will try to counter the blockholder's vote. The results are robust to allowing for information acquisition and trade. This suggests that regulations discouraging or prohibiting abstention, strategic behavior, and/or coordination may reduce efficiency.
{"title":"Blockholder Voting","authors":"Heski Bar-Isaac, Joel D. Shapiro","doi":"10.2139/ssrn.2928820","DOIUrl":"https://doi.org/10.2139/ssrn.2928820","url":null,"abstract":"By introducing a shareholder with many votes (a blockholder) to a standard model of voting, we uncover several striking results. First, if a blockholder is unbiased, she may not vote with all of her shares. This is efficient, as it prevents her vote from drowning out the information provided by other votes. Second, if this blockholder can announce her vote before the vote takes place, other shareholders may ignore their information and vote with the blockholder to support her superior information. Third, if the blockholder is biased, some shareholders will try to counter the blockholder's vote. The results are robust to allowing for information acquisition and trade. This suggests that regulations discouraging or prohibiting abstention, strategic behavior, and/or coordination may reduce efficiency.","PeriodicalId":170679,"journal":{"name":"ERN: Board Motivation & Incentives (Topic)","volume":"301 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134498729","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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