Board Interlocks and Outside Directors’ Protection
研究了特拉华州Schoon案后，外部董事的连锁关系如何促使公司恢复对其的补偿保护，发现共享外部董事的公司更可能采取增强保护措施，且外部董事的权力越大，公司回应的概率越高。
We examine the role of outside directors’ interlocks in restoring directors’ indemnification protection in response to Delaware’s Schoon v. Troy Corp. The case, which permitted a board to retroactively alter indemnification and advancement-of-expenses arrangements for a former director, left directors vulnerable unless their firm acted to restore protection. Using a hand-collected data set, we find that a firm became more than twice as likely to adopt enhanced indemnification protection once a firm with which it shared an outside director adopted protection. Our results suggest that interlocks contribute to outside directors’ knowledge and bargaining power in the boardroom. Consistent with the bargaining-power hypothesis, we find that several measures of outside directors’ power are associated with a higher probability of responding: a large proportion of outside directors, a designated independent lead director, and, with marginal significance, more board meetings in executive session. These results have legal and practical implications for corporate governance.