DP12317 The Inner Workings of the Board: Evidence from Emerging Markets
|Author(s):||Ralph de Haas, Daniel Ferreira, Tom Kirchmaier|
|Publication Date:||September 2017|
|Keyword(s):||Boards of directors, corporate governance, emerging markets|
|JEL(s):||G30, G38, K22|
|Programme Areas:||Financial Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12317|
We survey non-executive directors in emerging markets to obtain detailed information about the inner workings of corporate boards across a variety of institutional settings. We document substantial variation in the structure and conduct of boards as well as in directors' perceptions about the local legal environment. Further analysis indicates that directors who feel adequately empowered by local legislation are less likely to actively vote against board proposals. They also form boards that play a stronger role in the company's strategic decision-making. This suggests that a supportive legal environment allows directors to focus more on their advisory, as opposed to their monitoring, role.