Why do boards exist? Governance design in the absence of corporate law

Seminar abstract

In a historic setting where corporations are free to establish a board and determine its powers, boards arise in firms with numerous small shareholders, but large shareholders are ubiquitous.

The findings in this presentation proposes that boards do not arise to substitute for larger shareholder monitoring, but to mediate among shareholders when conflicts of interest and collection action costs are large.

Voting restrictions prevent block-holders from dominating and make boards representative.

Boards are conferred powers to mediate, but mediation and monitoring are intrinsically linked. Some boards appear mainly to advise,

While boards entail costs, some firms are forced to raise finance from small investors depending on the local distribution of wealth.

Booking

This seminar will be hosted via Zoom. It is free to attend and there is no need to book in advance. Please feel free to come along and bring your friends, colleagues and classmates.

Speaker bio

Charlotte Ostergaard is a Professor of Finance at the Department of Financial Econometrics of Norwegian Business School.

Her primary areas of interest are banking and corporate governance, and in particular the real effects of bank shocks and bank market integration on outcome variables such as bank lending to small businesses, firm investment and cash management, and inter-regional risk sharing.

She has also worked on shareholder activism and how social capital sustain the viability of the savings bank organisational form.

Currently, she is working on governance in Norwegian industrial corporations in the early 20th century and on entrepreneurial firms.

Charlotte Ostergaard's work has been published in the following journals;

• Journal of Finance
• Review of Financial Studies
• Review of Finance
• Journal of Political Economy

 We welcome you to join our guest on Wednesday 7th October at 2pm, Online via Zoom.