Board of director collusion, managerial incentives and firm values

摘要

This paper investigates the effects of board of director collusion on managerial incentives and firm values. Recent academic research hints at the social network of board of directors as an important conduit for coordinating corporate governance policies, such as managerial pay, and curbing competition. We study a model where managers can exert unobservable cost-cutting effort and investigate the consequences of and the incentives for coordinating managerial pay among corporate boards.