Information Flows, Organizational Structure, and Corporate Governance

57 Pages Posted: 11 Aug 2022 Last revised: 4 Dec 2023

See all articles by Nadya Malenko

Nadya Malenko

Boston College, Carroll School of Management; National Bureau of Economic Research (NBER); Finance Theory Group (FTG); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

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Date Written: April 28, 2023

Abstract

This survey provides an overview of theoretical and empirical research on information flows in corporations. It highlights key frictions preventing effective information flows and discusses how organizational structure and corporate governance can alleviate these frictions, focusing on three broad topics: 1) organizational design, such as the choice between centralized and decentralized decision-making; 2) composition and decision-making process of the board of directors; and 3) communication among shareholders and between shareholders and management in the context of shareholder activism. The goal of the survey is to draw connections between theoretical and empirical work and point out directions for future research.

Keywords: information flows, communication, organizational structure, delegation, board of directors, shareholder activism

JEL Classification: D23, D82, D83, G34, L22

Suggested Citation

Malenko, Nadya, Information Flows, Organizational Structure, and Corporate Governance (April 28, 2023). European Corporate Governance Institute – Finance Working Paper No. 841/2022, Olin Business School Center for Finance & Accounting Research Paper No. Forthcoming, Available at SSRN: https://ssrn.com/abstract=4179752 or http://dx.doi.org/10.2139/ssrn.4179752

Nadya Malenko (Contact Author)

Boston College, Carroll School of Management ( email )

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National Bureau of Economic Research (NBER) ( email )

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Finance Theory Group (FTG) ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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European Corporate Governance Institute (ECGI) ( email )

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