Abstract
The author thanks David Larcker for his assistance and support in designing this study, and the following people for their constructive comments on earlier versions of this manuscript: Barry Baysinger, Robert Dewar, Robert Duncan, Gareth Jones, and the associate editor and anonymous reviewers of ASQ. Based on predictions from agency theory and a theory of managerial hegemony, this study compares the board structure of 53 companies that privately repurchased stock at a premium above the market place-i.e., paid greenmail-and 57 companies that resisted greenmail. The decision to pay greenmail is used as a proxy for the board's ineffectiveness, which is defined as the inability of the board's outside directors to prevent management from making decisions-such as paying greenmail-that are in conflict with stockholders' interests. Boards that effectively resisted greenmail were found to have more outside directors, more directors with executive experience, and more directors who represented interorganizational transactions than boards of companies that paid greenmail.'
Keywords
Corporate governanceAccountingShareholderConstructivePrincipal–agent problemManagementHegemonyBusinessAgency (philosophy)Public relationsSociologyEconomicsPolitical scienceLaw
Related Publications
Corporate Governance and the Board of Directors: Performance Effects of Changes in Board Composition
Journal Article Corporate Governance and the Board of Directors: Performance Effects of Changes in Board Composition Get access BARRY D. BAYSINGER, BARRY D. BAYSINGER Texas A&M ...
Higher market valuation of companies with a small board of directors
I present evidence consistent with theories that small boards of directors are more effective. Using Tobin's Q as an approximation of market valuation, I find an inverse associa...
The Determinants of Board Composition
We identify factors that lead to changes among corporate directors. We hypothesize that the CEO succession process and firm performance will affect board composition. Our findin...
The Significance of Board Interlocks for Corporate Governance
Boards of directors of large American corporations are marked by a surprising degree of overlap in their memberships. The median Fortune 500 firm interlocked (shared directors) ...
A Stakeholder Approach to Corporate Governance: Managing in a Dynamic Environment
Preface Business Development Corporate Governance and the Changing Environment Business Trends Forms of Business Organization Corporate Governance Corporate Governance Models Th...
Publication Info
- Year
- 1987
- Type
- article
- Volume
- 32
- Issue
- 2
- Pages
- 163-163
- Citations
- 656
- Access
- Closed
External Links
Social Impact
Altmetric
PlumX Metrics
Social media, news, blog, policy document mentions
Citation Metrics
656
OpenAlex
Cite This
Rita D. Kosnik
(1987).
Greenmail: A Study of Board Performance in Corporate Governance.
Administrative Science Quarterly
, 32
(2)
, 163-163.
https://doi.org/10.2307/2393124
Identifiers
- DOI
- 10.2307/2393124