Abstract
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.
Original language | English |
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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
Public Lecture | 2020 CAFM : 15th Conference on Asia-Pacific Financial Markets |
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Country/Territory | Korea, Republic of |
City | Seoul |
Period | 4/12/20 → 5/12/20 |