ABSTRACT

While internal controls are often carefully set by firm owners to manage risks, operational losses caused by errors in people and procedures could occur if board directors’ monitoring functions are weakened by having private connections with senior managers. This paper provides empirical evidence that the presence of social tie between a firm’s CEO and its board member is associated with a higher likelihood of operational risk events after other key determinants are controlled for. Our sample consists of 168 event and non-event firms that are publicly listed in the U.S. and spans over a historical period over 2000–2008 when the Basel II Accord is in full operation. Our results imply that existing provisions against operational risk should take CEO-director social ties as an additional factor that can undermine corporate governance and expose firms to a higher level of operational risk.

摘要

虽然内部控制通常由公司所有者谨慎设置以管理风险，但如果董事会董事的监督功能因与高级管理人员的私人联系而削弱，则可能会出现由人员和程序错误造成的运营损失。本文提供的经验证据表明，在控制了其他关键决定因素后，公司 CEO 与其董事会成员之间存在的社会联系与更高的操作风险事件可能性相关。我们的样本包括 168 家在美国公开上市的事件和非事件公司，跨越 2000 年至 2008 年巴塞尔协议全面实施的历史时期。