Noted for Your Morning Procrastination for June 29, 2014
Morning Must-Read: Nick Hanauer: The Pitchforks Are Coming… For Us Plutocrats

Morning Must-Read: Jacob Rose et al.: Will Disclosure of Friendship Ties Between Directors and CEOs Yield Perverse Effects?

Jacob Rose et al.: Will Disclosure of Friendship Ties Between Directors and CEOs Yield Perverse Effects?: "We conduct an experiment...

...involving 56 active and experienced corporate directors... and a second experiment with MBA students.... Friendship ties caused directors to be more willing to approve reductions to research and development (R&D) expenses... to meet the CEO’s minimum bonus target more often than when the directors and CEO were not friends. However, disclosing friendship ties resulted in even greater reductions in R&D expenses and higher CEO bonuses.... Friendship ties between the CEO and board members can impair the directors’ independence and objectivity, and... disclosure of the relationships can worsen this effect.

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