Journal ArticleDOI
Do Co-Opted Directors Mitigate Managerial Myopia? Evidence from R&D Investments
TLDR
In this paper, the effect of co-opted directors on R&D investments was explored and it was shown that board co-option leads to significantly higher R&DI investments.Abstract:
We explore the effect of co-opted directors on R&D investments. Co-opted directors are those appointed after the incumbent CEO assumes office. Because a co-opted board represents a weakened governance mechanism that diminishes the probability of executive removal, managers are less likely to be removed and are more motivated to make long-term investments. Our evidence shows that board co-option leads to significantly higher R&D investments. To draw a causal inference, we execute a quasi-natural experiment using an exogenous regulatory shock from the Sarbanes-Oxley Act (SOX). Our results reveal that the effect of board co-option on R&D is more likely causal.read more
Citations
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Journal ArticleDOI
The dual effect of board gender diversity on R&D investments
TL;DR: In this article, the authors examine how gender diversity on boards of directors affects investment in research and development (R&D), thereby providing the platform for future ambidexterity of the organization.
Journal ArticleDOI
How do independent directors view corporate social responsibility (CSR) during a stressful time? Evidence from the financial crisis
TL;DR: This paper explored the effect of board independence on CSR investments during a stressful time, i.e. during the Great Recession, and found that strong board independence leads to a significant reduction in CSR.
Journal ArticleDOI
How do Independent Directors Influence Corporate Risk-Taking? Evidence from a Quasi-Natural Experiment
Pornsit Jiraporn,Sang Mook Lee +1 more
TL;DR: In this paper, the authors explore the effect of independent directors on corporate risk taking and find that board independence diminishes risk-taking significantly, as evidenced by substantially lower volatility in the stock returns.
Journal ArticleDOI
Fiduciary duty or loyalty? Evidence from co-opted boards and corporate misconduct
TL;DR: In this paper, the authors examine the effect of co-opted boards on corporate misconduct and document a significant positive relationship, finding that a one standard deviation increase in the proportion of coopted directors on a board leads to a 4.3% rise in corporate misconduct.
Journal ArticleDOI
Board co-option and default risk
TL;DR: This article found that co-opted boards facilitate more erratic and arbitrary decision-making, contributing towards default risk, and that one standard deviation increase in co-option increases default risk by 11% relative to normal levels.
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Posted Content
The Influence of Institutional Investors on Myopic R&D Investment Behavior
TL;DR: The authors examines whether institutional investors create or reduce incentives for corporate managers to reduce investment in research and development (RD otherwise, institutional ownership serves to reduce pressures on managers for myopic investment behavior).
Journal ArticleDOI
Co-opted Boards
TL;DR: In this article, the authors argue that not all independent directors are equally effective in monitoring top management, and that independent directors who are appointed by the CEO are likely to have stronger allegiance to the CEO and will be weaker monitors.
Journal ArticleDOI
The Effects and Unintended Consequences of the Sarbanes-Oxley Act on the Supply and Demand for Directors
TL;DR: In this article, the authors study the impact of the Sarbanes-Oxley Act (SOX) and other contemporary reforms on directors and boards, guided by their impact on the supply and demand for directors.
Journal ArticleDOI
Do Institutional Investors Exacerbate Managerial Myopia
John J. McConnell,Sunil Wahal +1 more
TL;DR: In this article, the authors examined corporate expenditures for property, plant and equipment (PP&E) and research and development (R&D) for over 2,500 firms from 1987 to 1994 and found a positive relation between expenditures for PP&E and R&D and institutional share ownership.
Journal ArticleDOI
Corporate investment myopia: a horserace of the theories
TL;DR: In this paper, the authors test two theories of corporate investment myopia which predict a distortion in investment policy with respect to the standard net present value rule and find that research and development expense is decreasing in the age of the chief executive.