3 ms·

> More board members may increase intransigence, decrease oversight (cover over who is really making the decisions and who is not), and turn US corps more burea

by dnomad 8y ago

> More board members may increase intransigence, decrease oversight (cover over who is really making the decisions and who is not), and turn US corps more bureaucratic. Take a look at the evidence in the real world (y'know, actual facts, not baseless speculation) and you will find strong indication that larger board sizes increase corporate performance. > Boards beholden to current workers may sacrifice a lot of progress to keep things comfy, at the expense of future workers and jobs. Again, this is the sort of thing that you could investigate by doing research of actual facts in the real world. You might start by looking at how German firms with significant worker board representation responded to reunification and Eastern Europe online. Hint: workers did not sacrifice future growth to keep their "comfy" wages. > Obviously it "works" in germany, for some amount of "works," but it should need no explanation that US companies as a whole are able to move faster, and in high tech, often with higher wages(!!) than in Germany. Like most "economic debates" in the US, I expect the debate around codetermination will be driven purely by ideology. There will be no serious review of the existing economic research and zero attempt to seriously investigate what works and doesn't work in any countries. What you'll get is just one side crying "Communist!" and the other side crying "Capitalist!" and there will be zero progress.

6502nerdface 8y ago
> Take a look at the evidence in the real world (y'know, actual facts, not baseless speculation) and you will find strong indication that larger board sizes increase corporate performance. So you have statistical evidence that an increase to board size on day t is associated with greater excess stock returns on days > t?
- dnomad 8y ago
  Believe it or not you can actually look this up yourself. The impact of board size on corporate performance has been pretty thoroughly researched.
  - icebraining 8y ago
    Yes, it has: "One of the most consistent empirical relationships about boards of directors is that board size is negatively related to firm performance (Hermalin and Weisbach, 2003). Yermack (1996) finds a statistically significant negative relationship between board size and firm performance as measured by Tobin’s Q with a sample of 452 large U.S. industrial corporations for the period of 1984-1991. In the same study Yermack also exhibited that companies with small boards have more favorable values for financial ratios. Similarly Eisenberg, Sundgren and Wells (1998) concluded the negative relationship between firm board size and performance measured by return on assets (ROA) for a sample of 879 small private firms in Finland. In their 1998 study, Barhart and Rosenstein revealed that companies with fewer board members have superior performance compared to companies with crowded boards (...)" https://www.researchgate.net/publication/321869618_The_Effect_of_Board_Size_on_Firm_Performance_Evidence_from_Turkey https://www.researchgate.net/publication/321869618_The_Effec...
    - 6502nerdface 8y ago
      To be fair, I wonder how well these studies control for the well known negative relationship between firm size (as measured by, e.g., market cap) and excess returns, since firm size is presumably a confounding covariate of board size.
    - dnomad 8y ago
      It's funny because you conveniently left out the fact that the single paper you quote finds no correlation. The point here, as stated before, is not uncritically accept nonsense about board size because it validates your ideology and to look at actual research and evidence on the topic. At some point if you want to be taken seriously (at least outside of the US) you need to do more than appeal to your ideology du jour.
      - icebraining 8y ago
        "conveniently"? You claim there is a positive correlation. A study finding no correlation goes against your position. The point here, as stated before, is not uncritically accept nonsense about board size because it validates your ideology and to look at actual research and evidence on the topic. Physician, heal thyself.

by dnomad 8y ago

6502nerdface 8y ago

> Take a look at the evidence in the real world (y'know, actual facts, not baseless speculation) and you will find strong indication that larger board sizes increase corporate performance. So you have statistical evidence that an increase to board size on day t is associated with greater excess stock returns on days > t?

dnomad 8y ago
Believe it or not you can actually look this up yourself. The impact of board size on corporate performance has been pretty thoroughly researched.
- icebraining 8y ago
  Yes, it has: "One of the most consistent empirical relationships about boards of directors is that board size is negatively related to firm performance (Hermalin and Weisbach, 2003). Yermack (1996) finds a statistically significant negative relationship between board size and firm performance as measured by Tobin’s Q with a sample of 452 large U.S. industrial corporations for the period of 1984-1991. In the same study Yermack also exhibited that companies with small boards have more favorable values for financial ratios. Similarly Eisenberg, Sundgren and Wells (1998) concluded the negative relationship between firm board size and performance measured by return on assets (ROA) for a sample of 879 small private firms in Finland. In their 1998 study, Barhart and Rosenstein revealed that companies with fewer board members have superior performance compared to companies with crowded boards (...)" https://www.researchgate.net/publication/321869618_The_Effect_of_Board_Size_on_Firm_Performance_Evidence_from_Turkey https://www.researchgate.net/publication/321869618_The_Effec...
  - 6502nerdface 8y ago
    To be fair, I wonder how well these studies control for the well known negative relationship between firm size (as measured by, e.g., market cap) and excess returns, since firm size is presumably a confounding covariate of board size.
  - dnomad 8y ago
    It's funny because you conveniently left out the fact that the single paper you quote finds no correlation. The point here, as stated before, is not uncritically accept nonsense about board size because it validates your ideology and to look at actual research and evidence on the topic. At some point if you want to be taken seriously (at least outside of the US) you need to do more than appeal to your ideology du jour.
    - icebraining 8y ago
      "conveniently"? You claim there is a positive correlation. A study finding no correlation goes against your position. The point here, as stated before, is not uncritically accept nonsense about board size because it validates your ideology and to look at actual research and evidence on the topic. Physician, heal thyself.