@article{ceee6d79400d4073a64ef81f9bd33fe7,
title = "The costs of entrenched boards",
abstract = "This paper investigates empirically how the value of publicly traded firms is affected by arrangements that protect management from removal. Staggered boards, which a majority of U.S. public companies have, substantially insulate boards from removal in either a hostile takeover or a proxy contest. We find that staggered boards are associated with an economically meaningful reduction in firm value (as measured by Tobin's Q). We also provide suggestive evidence that staggered boards bring about, and not merely reflect, a reduced firm value. Finally, we show that the correlation with reduced firm value is stronger for staggered boards that are established in the corporate charter (which shareholders cannot amend) than for staggered boards established in the company's bylaws (which shareholders can amend).",
keywords = "Agency costs, Antitakeover provisions, Boards, Corporate governance, Defensive tactics, Firm value, Mergers and acquisitions, Poison pills, Proxy fights, Staggered boards, Takeovers, Tender offers, Tobin's Q",
author = "Bebchuk, {Lucian A.} and Alma Cohen",
note = "Funding Information: We are grateful to Rajesh Aggarwal, Jennifer Arlen, John Coates, Rob Daines, Ehud Kamar, Allen Ferrell, Julian Franks, Jack Jacobs, Jay Lorsch, Guhan Subramanian, Manuel Trajtenberg, Belen Villalonga, David Yermack, Tom Bates and participants in seminars and conferences at Harvard, London Business School, Yale School of Management, Fordham, Virginia, and the American Law and Economics Annual Meeting, for their valuable suggestions. We also wish to thank Andrew Metrick for providing us with data. We benefited from the financial support of the NBER, the Harvard John M. Olin Center for Law, Economics, and Business, the BSI-Gamma Foundation, and the Nathan Cummins Foundation. ",
year = "2005",
month = nov,
doi = "10.1016/j.jfineco.2004.12.006",
language = "אנגלית",
volume = "78",
pages = "409--433",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier B.V.",
number = "2",
}