Antecedents and consequences of the two-tier board structure, SMS 2010

This study addresses two main research questions. First, does the adoption of the two tier board structure improve the quality of board oversight and firm performance? Second, what are the factors, which lead firms to switch from a unitary to a two-tiered board structure? Building upon the agency, the organizational efficiency and the resource dependence perspectives, we argue that the implementation of the two-tier board structure is likely to strengthen the relationship between firm performance and CEO dismissal and to generate significant performance improvements. Moreover, we suggest that the adoption of the two-tier structure  might be triggered by the desire to attract new foreign shareholding and to manage socio-political and managerial processes surrounding mergers and acquisitions. We empirically investigate these hypotheses using a sample of 250 French firms over the period.
1997 through 2008.