No 0310 “ Tying the Manager ’ s Hands ” : How Firms Can Make Credible Commitments That Make Opportunistic Managerial Intervention Less Likely

We discuss and empirically examine a firm-level equivalent of the ancient problem of “tying the King’s hands,” namely how to maximize managerial intervention for “good cause,” while avoiding intervention for “bad cause.” Managers may opportunistically intervene when such intervention produces private benefits. Overall firm performance is harmed as a result… CONTINUE READING