Executive Turnover and Outside Directors on Two-Tiered Boards

Managerial and Decision Economics, Volume 36, Issue 3, pp. 158–176

Posted: 17 Aug 2016 Last revised: 20 Apr 2020

See all articles by Benjamin Balsmeier

Benjamin Balsmeier

KU Leuven - Department of Managerial Economics, Strategy, and Innovation

Achim Buchwald

Monopolies Commission; Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Alexander Dilger

University of Münster

Date Written: April 2015

Abstract

This paper examines the determinants of executive turnover on two-tiered boards, emphasizing the monitoring role of supervisory board members with simultaneous outside directorships. Based on a unique sample of executives from large German firms, we find that outside supervisory board members generally increase executive turnover at the firms they monitor. This influence is especially pronounced when outside supervisory board members are simultaneously active as managers themselves and capital control is rather weak. These results suggest that external managers on supervisory boards enhance the monitoring intensity and substitute for weak capital control in the absence of large shareholders.

Keywords: Corporate Governance, Executive Turnover, Outside Directors, Shareholder Control

JEL Classification: J53, K22, K31, L22

Suggested Citation

Balsmeier, Benjamin and Buchwald, Achim and Dilger, Alexander, Executive Turnover and Outside Directors on Two-Tiered Boards (April 2015). Managerial and Decision Economics, Volume 36, Issue 3, pp. 158–176 , Available at SSRN: https://ssrn.com/abstract=2823573

Benjamin Balsmeier

KU Leuven - Department of Managerial Economics, Strategy, and Innovation ( email )

Naamsestraat 69 bus 3500
Leuven, 3000
Belgium

Achim Buchwald

Monopolies Commission ( email )

Heilsbachstr. 16
Bonn, 53123
Germany

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

Alexander Dilger (Contact Author)

University of Münster ( email )

Institute for Organisational Economics
Scharnhorststr. 100
Münster, D-48151
Germany
+49-251-83-25330 (Phone)
+49-251-83-28429 (Fax)

HOME PAGE: http://www.wiwi.uni-muenster.de/io/en/organisation/Dilger.html

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