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Recent Board Declassifications: A Response to Cremers and Sepe

10 Pages Posted: 18 May 2017 Last revised: 22 May 2017

Lucian A. Bebchuk

Harvard Law School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)

Alma Cohen

Tel Aviv University - Eitan Berglas School of Economics; Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: May 1, 2017

Abstract

This note offers an initial response to a study released earlier this month by Martijn Cremers and Simone Sepe, “Board Declassification Activism: The Financial Value of the Shareholder Rights Project.” Putting aside methodological questions about their analysis and accepting their results “as is,” we show that the results of this study do not provide a basis for opposing board declassifications. Appropriately interpreted, the results provide some significant evidence that declassifications are beneficial and no evidence that they are value-reducing. The results obtained for preceding years in prior published work by the authors either do not hold or are substantially reversed in the period examined by the current study. Overall, the results of the current study contradict and undermine the conclusions in the authors’ earlier published work in support of staggered boards.

JEL Classification: G32, G34, K22

Suggested Citation

Bebchuk, Lucian A. and Cohen, Alma, Recent Board Declassifications: A Response to Cremers and Sepe (May 1, 2017). Available at SSRN: https://ssrn.com/abstract=2970629 or http://dx.doi.org/10.2139/ssrn.2970629

Lucian Bebchuk (Contact Author)

Harvard Law School ( email )

Cambridge, MA 02138
United States
617-495-3138 (Phone)
617-812-0554 (Fax)

HOME PAGE: http://www.law.harvard.edu/faculty/bebchuk/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)

Alma Cohen

Tel Aviv University - Eitan Berglas School of Economics ( email )

Ramat Aviv, Tel Aviv, 69978
Israel

Harvard Law School ( email )

Cambridge, MA 02138
United States
(617) 496-4099 (Phone)
(617) 812-0554 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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