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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.

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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.

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