Article (Scientific journals)
Reining in Excessive Risk Taking by Executives: The Effect of Accountability
Lefebvre, Mathieu; vieider, ferdinand
2013In Theory and Decision, 75 (4), p. 495-517
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Abstract :
[en] Performance-contingent compensation by means of stock options may induce risk taking in agents that is excessive from the point of view of the company or the shareholders. We test whether increasing shareholder control may be an effective checking mechanism to rein in such excessive risk taking. We thus tell one group of experimental CEOs that they may have to justify their decision making processes in front of their shareholders. This indeed reduces risk taking and increases the performance of the companies they manage. Implications are discussed.
Disciplines :
Economic systems & public economics
Author, co-author :
Lefebvre, Mathieu  ;  Université de Liège - ULiège > HEC-Ecole de gestion : UER > Economie politique et finances publiques
vieider, ferdinand
Language :
English
Title :
Reining in Excessive Risk Taking by Executives: The Effect of Accountability
Publication date :
2013
Journal title :
Theory and Decision
ISSN :
0040-5833
eISSN :
1573-7187
Publisher :
Kluwer Academic Publishers, Netherlands
Volume :
75
Issue :
4
Pages :
495-517
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBi :
since 17 September 2012

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