TY - GEN
T1 - The founder's choice between democracy and autocracy in corporate governance
AU - Wang, Zhebing
AU - Han, Liyan
PY - 2010
Y1 - 2010
N2 - The paper presents a new model of founder's choice between democracy and autocracy in corporate governance and point out that there is a life-cycle effect on the choice of governance mode. At the start-up period, the autocracy mode is more efficiency. However, autocracy requires the founder being as the CEO to have sufficient own capitals. If external finance is needed, the founder would respond for higher capital cost as compensation for the manager's control benefit rents behavior and the control power loss of minority shareholders. Therefore, the capability of entrepreneur should be greater than the average managerial level in the professional manager market and the expected return of the "project" should be higher than the average level of the market as well. It is concluded that own funds and the founder's capability are substitutes.
AB - The paper presents a new model of founder's choice between democracy and autocracy in corporate governance and point out that there is a life-cycle effect on the choice of governance mode. At the start-up period, the autocracy mode is more efficiency. However, autocracy requires the founder being as the CEO to have sufficient own capitals. If external finance is needed, the founder would respond for higher capital cost as compensation for the manager's control benefit rents behavior and the control power loss of minority shareholders. Therefore, the capability of entrepreneur should be greater than the average managerial level in the professional manager market and the expected return of the "project" should be higher than the average level of the market as well. It is concluded that own funds and the founder's capability are substitutes.
KW - Control benefits
KW - Corporate governance
KW - Democracy and autocracy
KW - Founders
KW - Principle-agent problem
UR - https://www.scopus.com/pages/publications/78649637505
U2 - 10.1109/ICEE.2010.324
DO - 10.1109/ICEE.2010.324
M3 - 会议稿件
AN - SCOPUS:78649637505
SN - 9780769539973
T3 - Proceedings of the International Conference on E-Business and E-Government, ICEE 2010
SP - 1267
EP - 1270
BT - Proceedings of the International Conference on E-Business and E-Government, ICEE 2010
T2 - 1st International Conference on E-Business and E-Government, ICEE 2010
Y2 - 7 May 2010 through 9 May 2010
ER -