- 09 мая 2014, 16:30
- Harvard Business Review
Similarity of political views between CEOs and their boards strengthens directors’ empathy for chief executives and thus weakens their monitoring of CEO performance and compensation, says a team led by Jongsub Lee of the University of Florida. A study of thousands of U.S. firms shows that this political alignment, which is common, also reduces the quality of financial reporting: A small increase in board–CEO “political homophily” leads to a 3% increase in the marginal probability of a firm’s being involved in high-profile corporate fraud. The alignment effects are most pronounced for small boards that frequently interact with the top executive, the researchers say.