Information Flows, Organizational Structure, and Corporate Governance
57 Pages Posted: 11 Aug 2022 Last revised: 1 May 2023
Date Written: April 28, 2023
This survey provides an overview of theoretical and empirical research on information flows in corporations. It highlights key frictions preventing effective information flows and discusses how organizational structure and corporate governance can alleviate these frictions, focusing on three broad topics: 1) organizational design, such as the choice between centralized and decentralized decision-making; 2) composition and decision-making process of the board of directors; and 3) communication among shareholders and between shareholders and management in the context of shareholder activism. The goal of the survey is to draw connections between theoretical and empirical work and point out directions for future research.
Keywords: information flows, communication, organizational structure, delegation, board of directors, shareholder activism
JEL Classification: D23, D82, D83, G34, L22
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