Elective corporate governance : does board choice matter?

GELTER, Martin; SIEMS, Mathias

doi:10.1016/j.irle.2024.106190

Elective corporate governance : does board choice matter?

dc.contributor.author	GELTER, Martin
dc.contributor.author	SIEMS, Mathias
dc.date.accessioned	2024-06-06T10:32:05Z
dc.date.available	2024-06-06T10:32:05Z
dc.date.issued	2024
dc.description	Published online: 28 February 2024	en
dc.description.abstract	Recent literature discusses how “menu laws” allow corporations to opt into one of multiple competing statutory regimes. This paper contributes to this literature by presenting original empirical research on the choice between corporate board models. Today, many countries not only allow modifications of a particular board structure, but they provide separate legal templates, giving firms a choice between a one-tier and a two-tier board model (and sometimes a third hybrid model). However, how companies actually use these rules is largely underexplored. Based on data from 14 European countries that permit a choice between two models, this paper examines the use of this form of “elective corporate governance” at the firm level: what types of firms make use of which model and whether this choice can be associated with specific financial measures such as operating revenue, cash ratio and leverage. The descriptive statistics show that introducing board choice has led to a gradual decline of the two-tier model. Yet, despite this decline, we did not find that the regression results unambiguously speak against the two-tier model, nor did we find that companies that have changed their board model with the introduction of choice performed better than companies that have retained the original model.	en
dc.description.sponsorship	This article was published Open Access with the support from the EUI Library through the CRUI - Elsevier Transformative Agreement (2023-2027)	en
dc.format.mimetype	application/pdf	en
dc.identifier.citation	International review of law and economics, 2024, Vol. 78, Art. 106190, OnlineFirst	en
dc.identifier.doi	10.1016/j.irle.2024.106190
dc.identifier.issn	0144-8188
dc.identifier.issn	1873-6394
dc.identifier.other	106190
dc.identifier.uri	https://hdl.handle.net/1814/76918
dc.identifier.volume	78	en
dc.language.iso	en	en
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dc.publisher	Elsevier	en
dc.relation.ispartof	International review of law and economics	en
dc.rights	info:eu-repo/semantics/openAccess	en
dc.rights.license	Attribution 4.0 International	*
dc.rights.uri	http://creativecommons.org/licenses/by/4.0/	*
dc.title	Elective corporate governance : does board choice matter?	en
dc.type	Article	en
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