Furthermore, we examine whether external blockholders
and hedge funds that may be better positioned to monitor firm's management (Shleifer and Vishny, 1986; Brav, Jiang, Partnoy, and Thomas, 2008) put pressure on corporate directors to replace poorly performing CEOs (Denis, Denis, and Sarin, 1997) with better replacements to boost investment performance turnarounds.
, weak securities markets, high private benefits of control,
Specifically, this research will include the influence of institutional and other relevant blockholders
on earnings management.
H4 selection: Firms with blockholders
are more likely to select outside candidates as their new CEOs.
Na mesma linha de estudos, Haye (1997) afirma que a presenca de blockholders
(acionistas com um grande bloco de acoes) impacta de forma negativa no montante pago ao CEO, com o que corroboram Firth et al.
Many studies in the US and other countries have focused on blockholders
, using the SEC 5% threshold as their measurement scheme (Boyd and Solarino, 2016).
The excess power of controlling shareholders has been the focus of attention of important body of literature on corporate governance given that relevant firm blockholders
have incentives and ability to maintain internal control systems that fit their interests and ease the use of private benefits of control as predicted by the expropriation effect argument (Brandao & Crisostomo, 2015; Crisostomo & Brandao, 2016; Johnson, La Porta, Lopez-de-Silanes, & Shleifer, 2000; Shleifer & Vishny, 1997).
Lins (2003) concludes that non-management blockholders
have a positive impact on firm valuation, while Bonilla, Sepulveda and Carvajal (2010) find family firms to perform better than non-family firms.
The controlling family generally serves as a more effective monitor than other blockholders
due to the linkage of firm performance and family wealth.
In the absence of regulatory requirements, a firm will presumably invite a financial expert to sit on its board for one of the following reasons: (1) management requires advice on corporate finance or financial reporting strategy, (2) management wants to credibly commit itself to more intense monitoring of corporate finance or financial reporting strategies, or (3) shareholders (for example, blockholders
) pressure or require management to add an expert to the board because of concerns about insufficient monitoring.
Governance through trading and intervention: A theory of multiple blockholders
. Review of Financial Studies, 7, 2395-2428.
The allocation of risk between owners and stakeholders is largely determined by the capital ownership structure, and this because blockholders
(ie, large shareholders with at least 5% of shares) and minority shareholders may have opposed risk preferences.