Does trust between the board of directors and CEO improve corporate board governance? Contrary to the conventional wisdom that trust improves the performance of all institutions in a society, we find that firms with higher levels of board–CEO trust are less effective. High trust is associated with low CEO pay-performance sensitivity, low CEO turnover-performance sensitivity, and low board meeting attendance. Less board monitoring in turn leads to poor acquisition performance. Our results suggest that in the institutional setting of a board of directors, trust can be too much of a good thing.
|Publication status||Published - 5 Dec 2020|
|Event||2020 CAFM : 15th Conference on Asia-Pacific Financial Markets|
- Seoul, Korea, Republic of
Duration: 4 Dec 2020 → 5 Dec 2020
|Public Lecture||2020 CAFM : 15th Conference on Asia-Pacific Financial Markets|
|Country/Territory||Korea, Republic of|
|Period||4/12/20 → 5/12/20|