A Theory of Board Control and Size

  title={A Theory of Board Control and Size},
  author={Milton Harris and Artur Raviv},
  journal={IO: Firm Structure},
We extend the traditional view of corporate boards as monitors to include a role for outside board members as suppliers of expertise or information. Indeed, both outsiders and insiders may have private information relevant to the decision. Because of the agency problem between managers and owners (who are assumed to be represented by the outside directors), neither party will communicate his or her information fully to the other. Outsiders in our model control agency problems by making some… 

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