Board Structure Variety in Cooperatives
14 Pages Posted: 1 Jun 2022
Date Written: May 30, 2022
This paper investigates why agricultural cooperatives exhibit different principles for the allocation of decision rights between the Board of Directors and the Management. A mass-action interpretation of the Nash equilibrium in an investment proposal game shows that, on the one hand, board structure variety is an equilibrium outcome while, on the other, the Traditional model (the board has full control) and the Management model (the professional management makes up the Board of the cooperative society) perform better than the Corporation model (the Management is in full control of the cooperative firm).
Keywords: internal governance, board of directors, management, decision rights, game theory
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