• DOI:10.1093/RFS/HHL030
Corpus ID: 17891873

A Theory of Board Control and Size

@article{Harris2005ATO,
  title={A Theory of Board Control and Size},
  author={M. Harris and Artur Raviv},
  journal={Corporate Finance: Governance},
  year={2005}
}

M. Harris, Artur Raviv

Published 2005

Business

Corporate Finance: Governance

This article presents a model of optimal control of corporate boards of directors. We determine when one would expect inside versus outside directors to control the board, when the controlling party will delegate decision-making to the other party, the extent of communication between the parties, and the number of outside directors. We show that shareholders can sometimes be better off with an insider-controlled board. We derive endogenous relationships among profits, board control, and the… CONTINUE READING

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