The Inner Workings of the Board: Evidence from Emerging Markets
35 Pages Posted: 22 Mar 2017 Last revised: 26 May 2019
Date Written: May 24, 2019
We survey non-executive directors in emerging markets to obtain detailed information about the inner workings of corporate boards across a variety of institutional settings. We document substantial variation in the structure and conduct of boards as well as in directors’ perceptions of the local legal environment. Our analysis indicates that directors who feel adequately empowered by local legislation are less likely to vote against board proposals. They also form boards that play a stronger role in the company’s strategic decision-making. The evidence suggests that a supportive legal environment allows directors to focus more on their advisory role rather than on their monitoring role.
Keywords: boards of directors, corporate governance, emerging markets
JEL Classification: G30, G38, K22
Suggested Citation: Suggested Citation