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The Managerial Thesis Revised: Independent Directors and the CEO 'Directorate'

50 Pages Posted: 19 Nov 2007  

Allen Kaufman

University of New Hampshire - Department of Management

Ernie Englander

George Washington University - Department of Strategic Management & Public Policy

Christopher L. Tucci

Ecole Polytechnique Federale de Lausanne - MTEI

Date Written: July 2006

Abstract

This paper makes two claims. The first posits that CEOs, active and retired, have disproportionately filled the independent director positions mandated by Sarbanes-Oxley and the private exchange reforms. The second builds from this observation: Corporate control has shifted from focal firm managerial teams to a CEO-inter-corporate directorate. To test these hypothesis, we examine the board demographics of those publicly-traded corporations whose CEOs are members of The Business Roundtable, the premier lobbying organization representing the interests of U.S. corporate managers. We constructed our hypotheses to resolve conflicting assessments among agency theorists and corporate strategy scholars on independent directors' promised redemptive effects for resolving issues of excessive CEO pay and reconciling CEO pay for performance.

Keywords: corporate governance, CEOs, boards of directors

JEL Classification: G30, G34, K22, M10

Suggested Citation

Kaufman, Allen and Englander, Ernie and Tucci, Christopher L., The Managerial Thesis Revised: Independent Directors and the CEO 'Directorate' (July 2006). Available at SSRN: https://ssrn.com/abstract=1030845 or http://dx.doi.org/10.2139/ssrn.1030845

Allen Kaufman

University of New Hampshire - Department of Management ( email )

Durham, NH 03824
United States
603-862-4535 (Phone)

Ernie Englander (Contact Author)

George Washington University - Department of Strategic Management & Public Policy ( email )

2201 G Street Northwest
615E Funger Hall/
Washington, DC 20052
United States
202-994-8203 (Phone)
202-994-8113 (Fax)

Christopher L. Tucci

Ecole Polytechnique Federale de Lausanne - MTEI ( email )

Odyssea
Station 5
Lausanne, 1015
Switzerland
+41.21.693.0023 (Phone)
+41.21.693.0020 (Fax)

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