The internal governance of firms
By: Viral V. Acharya, Stewart C. Myers, Raghuram Rajan.
Contributors: Myers, Stewart C.; Rajan, Raghuram.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 15568; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15568.
Publisher: National Bureau of Economic Research
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We develop a model of internal governance where the self-serving actions of top management are limited by the potential reaction of subordinates.  Internal governance can mitigate agency problems and ensure that firms have substantial value, even with little or no external governance by investors.  Internal governance works best when both top management and subordinates are important in generating cash flow.  External governance, even if crude and uninformed, can complement internal governance and improve efficiency.  This leads to a theory of investment and dividend policy, where dividends are paid by self-interested CEOs to maintain a balance between internal and external control.  Our paper can explain why firms with limited external oversight, and firms in countries with poor external governance, can have substantial value"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/22/2009.

Includes bibliographical references.

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