61 Pages Posted: 31 Dec 1998
One of the goals of the corporate governance movement has been to replace the current procedurally based duty of care with an equity-based model. For such an approach to be viable, a linkage between better director management monitoring and heightened board equity ownership must be demonstrated. This Article finds such a linkage empirically. The authors report that based on an examination of a substantial number of public companies, the greater the dollar value of the outside director equity ownership: (i) the better the company?s overall performance, and (ii) the more likely in a poorly performing company that there will be a disciplinary-type CEO turnover.
JEL Classification: G31, G32, G34
Suggested Citation: Suggested Citation
Bhagat, Sanjai and Carey, Dennis C. and Elson, Charles M., Director Ownership, Corporate Performance, and Management Turnover. Available at SSRN: https://ssrn.com/abstract=134488 or http://dx.doi.org/10.2139/ssrn.134488
By Tod Perry
By Kevin Murphy