Deadlock on the Board

57 Pages Posted: 7 Dec 2017 Last revised: 2 Jan 2020

See all articles by Jason Donaldson

Jason Donaldson

Washington University in St. Louis

Nadya Malenko

University of Michigan, Stephen M. Ross School of Business; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Giorgia Piacentino

Columbia University

Multiple version iconThere are 3 versions of this paper

Date Written: December 7, 2019


We develop a dynamic model of board decision-making akin to dynamic voting models in the political economy literature. We show a board could retain a policy all directors agree is worse than an available alternative. Thus, directors may retain a CEO they agree is bad -- deadlocked boards lead to entrenched CEOs. We explore how to compose boards and appoint directors to mitigate deadlock. We find board diversity and long director tenure can exacerbate deadlock. We rationalize why CEOs and incumbent directors have power to appoint new directors: to avoid deadlock. Our model speaks to short-termism, staggered boards, and proxy access.

Keywords: board of directors, dynamic decision-making, deadlock, entrenchment, director elections, CEO turnover, diversity, tenure, staggered boards

JEL Classification: D71, D72, D74, G34

Suggested Citation

Donaldson, Jason and Malenko, Nadya and Piacentino, Giorgia, Deadlock on the Board (December 7, 2019). Review of Financial Studies, Forthcoming, European Corporate Governance Institute – Finance Working Paper No. 645/2019, Available at SSRN: or

Jason Donaldson

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Nadya Malenko (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Giorgia Piacentino

Columbia University ( email )

New York

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