Private benefits and board size: International evidence

Shinya Shinozaki, Konari Uchida

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


In our analyses of 10,390 companies from 51 countries, we find that in countries that have small capital markets free cash flow is positively related to board size. However, this positive relation becomes significantly weak for companies in large securities markets. This result suggests that managers in underdeveloped capital markets have an incentive to construct less effective boards to extract private benefits. However, the distorted managerial incentive is alleviated in developed countries that have various disciplinary mechanisms to ensure good governance practices. We do not find clear evidence that legal protection of shareholder rights mitigates the managerial incentive to construct less effective boards.

Original languageEnglish
Pages (from-to)109-124
Number of pages16
JournalCorporate Board: Role, Duties and Composition
Issue number1 A
Publication statusPublished - 2011

All Science Journal Classification (ASJC) codes

  • Business and International Management


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