Board Capital, Staggered Board Clause and Corporate Risk-Taking
WANG Kai，FAN Hejun，XUE Kunkun，XU Jinhua
1. Capital University of Economics and Business, Beijing, China; 2. Nankai University, Tianjin, China; 3. Guangdong University of Technology, Guangzhou, China
Abstract：This paper focuses on one important way to protect managers’ controlling rights in China’s capital market, that is, the establishment of staggered board clause. We analyze what affects the establishment of this clause and what are the consequences. Firstly, based on resource perspective, this study proposes that board capital has an important impact on the establishment of staggered board clause. Secondly, taking corporate risk-taking as the research situation, this study explores two different mechanisms through which the staggered board clause works. One is from resource perspective, and the other is from agency perspective. Using data about staggered board clause collected from articles of association, this study empirically tests what affects the establishment of this clause and its consequences. We find that, board capital positively affects the establishment of staggered board clause, while its establishment negatively moderates the positive relationship between board capital and corporate risk-taking.
