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Do Independent Directors Curb Financial Fraud? The Evidence and Proposals for Further Reform

dc.contributor.authorAvci, S. Burcu
dc.contributor.authorSchipani, Cindy A.
dc.contributor.authorSeyhun, H. Nejat
dc.date.accessioned2017-11-20T14:55:29Z
dc.date.available2017-11-20T14:55:29Z
dc.date.issued2018-08
dc.identifier1352en_US
dc.identifier.citationForthcoming Indiana Law Journal 757 (2018).en_US
dc.identifier.urihttps://hdl.handle.net/2027.42/139595
dc.description.abstractIn this article, we argue that the U.S. corporate governance rules put too much faith in the independent board members and insufficient emphasis on the shareholders themselves to control and monitor the top management. Given the agency problem between the board of directors and the shareholders, outside directors can be captured by management, thereby leading to inadequate checks on management. The evidence presented in this paper shows that outside board members do not exercise sufficient controls on the management even when the management has gone awry. To solve this agency problem, we propose increasing the power of the principals: make shareholder resolutions binding on management, require a one share, one vote rule to increase the voting rights of shareholders, as well as give the shareholders the ability to directly nominate and/or actively vote against board members.en_US
dc.subjectCorporationsen_US
dc.subjectSecurities Lawen_US
dc.subjectDirectorsen_US
dc.subjectCorporate Governanceen_US
dc.subjectSarbanes Oxleyen_US
dc.subjectCorporate Scandalsen_US
dc.subjectCorporate Lawen_US
dc.subjectShareholdersen_US
dc.subject.classificationLaw, History, Communicationen_US
dc.titleDo Independent Directors Curb Financial Fraud? The Evidence and Proposals for Further Reformen_US
dc.typeWorking Paperen_US
dc.subject.hlbsecondlevelBusiness (General)en_US
dc.subject.hlbtoplevelBusiness
dc.contributor.affiliationumRoss School of Businessen_US
dc.contributor.affiliationumcampusAnn Arbor
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/139595/1/1352_Schipani_Nov17.pdf
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/139595/4/1352_Schipani_Aug18.pdf
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/139595/6/1352_SchipaniOct2018.pdf
dc.description.filedescriptionDescription of 1352_Schipani_Aug18.pdf : Aug 2018 Pre-publication draft
dc.description.filedescriptionDescription of 1352_SchipaniOct2018.pdf : October 2018 revision
dc.owningcollnameBusiness, Stephen M. Ross School of - Working Papers Series


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