PhD Seminar with Mengyu Yang

Title: What Happens When Owners Choose the Board? Evidence from Shareholder-Dominated Nomination

Abstract:
This paper examines how different types of shareholders influence corporate governance and board composition in Swedish public firms, where the largest shareholders directly nominate board directors. Several factors inhibit some investors from serving on the board, most notably the need for liquidity, limited resources, and unfamiliarity with the local governance model. However, participation in the Nomination Committee (NC) provides these investors with a direct voice in governance without the frictions associated with board membership. Exploiting a 2008 governance reform as a natural experiment, I find that allowing shareholders to be directly involved in nominating directors increases both board turnover–performance sensitivity and the likelihood of appointing female directors.