The Costs of Entrenched Boards

  title={The Costs of Entrenched Boards},
  author={L. Bebchuk and A. Cohen},
  journal={NBER Working Paper Series},
  • L. Bebchuk, A. Cohen
  • Published 2003
  • Business
  • NBER Working Paper Series
  • This paper investigates empirically how the value of publicly traded firms is overall affected by arrangements protecting management from removal. A majority of U.S. public companies have staggered boards that substantially insulate the board from removal via a hostile takeover or a proxy contest. We find that staggered boards are associated with an economically significant reduction in firm value (as measured by Tobin's Q). We also find evidence consistent with staggered boards' bringing about… CONTINUE READING
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