Ownership Structure and Board Composition: A Multi-Country Test of Agency Theory Predictions
Hong Kong University of Science & Technology Business School Research Paper
Managerial and Decision Economics, Vol. 15, pp. 359-368, 1994
10 Pages Posted: 14 Aug 2007
Abstract
Patterns of corporate governance and control differ significantly across countries because of national differences in structures of ownership and composition of boards of directors. Based on agency theory, we examine the relationship between ownership structure and the composition of the board of directors of 390 large manufacturing firms based in Japan, Western Europe and the United States. In particular, we examine how ownership concentration, bank control and state ownership affect the percentage of outside directors on the corporate boards. The results show that, consistent with predictions of agency theory, ownership structure has significant effects on board composition.
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