Board composition, CEO turnover and firm value
This paper tests the effect of an exogenous shock, the Sarbanes-Oxley Act (SOX) of 2002, on the structure of corporate boards and their efficiency as a monitoring mechanism. The results suggest an increase in the participation of independent directors at the expense of insiders. Consequently, we inv...
Saved in:
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | article |
| Published: |
2016
|
| Online Access: | http://hdl.handle.net/10725/5288 http://dx.doi.org/10.1504/IJFSM.2016.080118 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php http://www.inderscienceonline.com/doi/abs/10.1504/IJFSM.2016.080118 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1864513465780011008 |
|---|---|
| author | Dah, Mustafa A. |
| author2 | Hurst, Matthew |
| author2_role | author |
| author_facet | Dah, Mustafa A. Hurst, Matthew |
| author_role | author |
| dc.creator.none.fl_str_mv | Dah, Mustafa A. Hurst, Matthew |
| dc.date.none.fl_str_mv | 2016 2017-02-28T13:35:18Z 2017-02-28T13:35:18Z 2017-02-28 |
| dc.identifier.none.fl_str_mv | 1460-6712 http://hdl.handle.net/10725/5288 http://dx.doi.org/10.1504/IJFSM.2016.080118 Dah, M. A., & Hurst, M. (2016). Board composition, CEO turnover and firm value: the effect of the Sarbanes-Oxley Act. International Journal of Financial Services Management, 8(3), 217-239. http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php http://www.inderscienceonline.com/doi/abs/10.1504/IJFSM.2016.080118 |
| dc.language.none.fl_str_mv | en |
| dc.relation.none.fl_str_mv | International Journal of Financial Services Management |
| dc.rights.*.fl_str_mv | info:eu-repo/semantics/openAccess |
| dc.title.none.fl_str_mv | Board composition, CEO turnover and firm value the effect of the Sarbanes-Oxley Act |
| dc.type.none.fl_str_mv | Article info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/article |
| description | This paper tests the effect of an exogenous shock, the Sarbanes-Oxley Act (SOX) of 2002, on the structure of corporate boards and their efficiency as a monitoring mechanism. The results suggest an increase in the participation of independent directors at the expense of insiders. Consequently, we investigate the implications of board composition changes on CEO turnover and firm value. We document a significant reduction in CEO turnover in the post-SOX period. We also demonstrate that, after SOX, a board dominated by independent directors is less likely to remove a CEO owing to poor performance. Finally, we highlight a negative association between the change in board composition and firm value. Contrary to the legislators' objectives, we suggest that the change in board structure brings about inefficient monitoring and promotes an unfavourable trade-off between independent directors and insiders. |
| eu_rights_str_mv | openAccess |
| format | article |
| id | LAURepo_e961de8640e02bc4170c78b4daaf0d80 |
| identifier_str_mv | 1460-6712 Dah, M. A., & Hurst, M. (2016). Board composition, CEO turnover and firm value: the effect of the Sarbanes-Oxley Act. International Journal of Financial Services Management, 8(3), 217-239. |
| language_invalid_str_mv | en |
| network_acronym_str | LAURepo |
| network_name_str | Lebanese American University repository |
| oai_identifier_str | oai:laur.lau.edu.lb:10725/5288 |
| publishDate | 2016 |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| spelling | Board composition, CEO turnover and firm valuethe effect of the Sarbanes-Oxley ActDah, Mustafa A.Hurst, MatthewThis paper tests the effect of an exogenous shock, the Sarbanes-Oxley Act (SOX) of 2002, on the structure of corporate boards and their efficiency as a monitoring mechanism. The results suggest an increase in the participation of independent directors at the expense of insiders. Consequently, we investigate the implications of board composition changes on CEO turnover and firm value. We document a significant reduction in CEO turnover in the post-SOX period. We also demonstrate that, after SOX, a board dominated by independent directors is less likely to remove a CEO owing to poor performance. Finally, we highlight a negative association between the change in board composition and firm value. Contrary to the legislators' objectives, we suggest that the change in board structure brings about inefficient monitoring and promotes an unfavourable trade-off between independent directors and insiders.PublishedN/A2017-02-28T13:35:18Z2017-02-28T13:35:18Z20162017-02-28Articleinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article1460-6712http://hdl.handle.net/10725/5288http://dx.doi.org/10.1504/IJFSM.2016.080118Dah, M. A., & Hurst, M. (2016). Board composition, CEO turnover and firm value: the effect of the Sarbanes-Oxley Act. International Journal of Financial Services Management, 8(3), 217-239.http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.phphttp://www.inderscienceonline.com/doi/abs/10.1504/IJFSM.2016.080118enInternational Journal of Financial Services Managementinfo:eu-repo/semantics/openAccessoai:laur.lau.edu.lb:10725/52882021-03-19T09:10:09Z |
| spellingShingle | Board composition, CEO turnover and firm value Dah, Mustafa A. |
| status_str | publishedVersion |
| title | Board composition, CEO turnover and firm value |
| title_full | Board composition, CEO turnover and firm value |
| title_fullStr | Board composition, CEO turnover and firm value |
| title_full_unstemmed | Board composition, CEO turnover and firm value |
| title_short | Board composition, CEO turnover and firm value |
| title_sort | Board composition, CEO turnover and firm value |
| url | http://hdl.handle.net/10725/5288 http://dx.doi.org/10.1504/IJFSM.2016.080118 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php http://www.inderscienceonline.com/doi/abs/10.1504/IJFSM.2016.080118 |