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The Board of Directors

  • Ettore Croci
Chapter

Abstract

Boards exist because they are an optimal response to the conflicts of interests between shareholders and managers, and between types of shareholders. While there is a wide consensus on this point, the literature is more divided on how directors should split their time and energies between monitoring and advising the managers. The monitoring role has been considered the primary duty of the directors for a long time, but recent studies show that directors devote a fair share of their time to advising managers. However, directors can effectively advise managers only when managers share information. Managers are reluctant to do this because directors can use the shared information to monitor them. The chapter also presents the main difference between one-tier and two-tier boards and discusses director election .

Keywords

Board Monitoring Advisor Election One-tier Two-tier Information 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Ettore Croci
    • 1
  1. 1.Università Cattolica del Sacro CuoreMilanoItaly

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