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What Do Boards Really Do? Evidence from Minutes of Board Meetings

Miriam Schwartz-Ziv

Michigan State University

Michael S. Weisbach

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER)

October 2011

NBER Working Paper No. w17509

We analyze a unique database from a sample of real-world boardrooms - minutes of board meetings and board-committee meetings of eleven business companies for which the Israeli government holds a substantial equity interest. We use these data to evaluate the underlying assumptions and predictions of models of boards of directors. These models generally fall into two categories: "managerial models" assume boards play a direct role in managing the firm, and "supervisory models" assume that boards' monitor top management but do not make business decisions themselves. Consistent with the supervisory models, our minutes-based data suggest that boards spend most of their time monitoring management: 67% of the issues they discussed were of a supervisory nature, they were presented with only a single option in 99% of the issues discussed, and they disagreed with the CEO only 3.3% of the time. In addition, managerial models describe boards at times as well: Boards requested to receive further information or an update for 8% of the issues discussed, and they took an initiative with respect to 8.1% of them. In 63% of the meetings, boards took at least one of these actions or did not vote in line with the CEO.

Number of Pages in PDF File: 45

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Date posted: October 14, 2011  

Suggested Citation

Schwartz-Ziv, Miriam and Weisbach, Michael S., What Do Boards Really Do? Evidence from Minutes of Board Meetings (October 2011). NBER Working Paper No. w17509. Available at SSRN: http://ssrn.com/abstract=1944007

Contact Information

Miriam Schwartz-Ziv (Contact Author)
Michigan State University ( email )
315 Eppley Center
East Lansing, MI MICHIGAN 48824-1122
United States
8573127793 (Phone)
8573127793 (Fax)
HOME PAGE: http://miriamschwartzziv.wix.com/mysite
Michael S. Weisbach
Ohio State University (OSU) - Department of Finance ( email )
2100 Neil Avenue
Columbus, OH 43210-1144
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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References:  49
Citations:  4
Footnotes:  24

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