Economical preconditions of functioning of independent boards of directors in view of neoclassical economical theory

Andrey, Rudkov (2011): Economical preconditions of functioning of independent boards of directors in view of neoclassical economical theory.

Abstract

The article examines analytically economical preconditions and motivation of economical agents to use independent boards in corporate government of a firm. Behavior of economical agents (shareholders and management of a firm) is analyzed in view of neoclassical economical theory. In survey author analyzes behavior of shareholders and makes conclusion that for shareholder the most efficient way to minimize transactional costs while being invested in stocks of a company is to delegate some functions (related with control and increasing shareholders value) in independent board of directors.

• Item Type: MPRA Paper
• Language: English
• Keywords: transactional costs, corporate government, neoclassical theory
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration; A - General Economics and Teaching > A1 - General Economics; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B13 - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School); G - Financial Economics > G3 - Corporate Finance and Governance

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