Who Disciplines Management in Poorly Performing Companies?

Working paper

Economic theory points to five parties active in disciplining management of poorly performing firms: holders of large share blocks, acquirers of new blocks, bidders in take-overs, non-executive directors, and investors during periods of financial distress. This Paper reports the first comparative evaluation of the role of these different parties in the discipline of management. We find that, in the UK, most parties, including holders of substantial share blocks, exert little discipline and th...

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Authors: Franks, J; Mayer, C; Renneboog, L

• Publisher: CEPR
• Series: Discussion Papers
• Publication date: 2001-01-01
• Language: English