外文翻譯--獨立董事和董事會金融風(fēng)險控制

1、中文 中文 2390 字， 字，1165 單詞 單詞原文 Independent Directors and Board Control in Venture FinanceMaterial Source:Berkeley Program in Law and Economics,Working Paper SeriesAurthor: Brain BroughmanIntroduction The financing contract

2、 between an entreprenur and investor must address the parties’divergent interests.Ideally the contract align their interests across all contingencies.Due to boundend rationality,transaction costs,and non-verifiable infor

3、mation,however,a complete financing contract is not possibleAghion and Bolton,1992. Instead,the allocation of board seats and other control rights determines who gets to decide future investment and operating decisions l

4、eft out of the contract.If one party holds a majority of the board seats it can use this position opportunistically,causing the firm to pursue actions which benefit it at the expense of the firm’s aggregate welfare. The

5、financial contracting literature suggests two partial,but imperfect,solutions to this problem:renegotiationCoase,1960;Grossman and Hart,1986,and state-contingent control(Aghion and Bolton,1992;Dewatripont and Tirole,1994

6、). While there is evidence that private firms sometimes use renegotiation(Broughman and Fried,2007)and state-contingent control(Kaplan and Stromberg,2003),both solutions are limited in various respects and neither can fu

7、lly remove the risk of holdup. In this article,I model an alternative solution to this problem,based on a governance arrangement frequently used in firms financed by venture capital‘VC’.In a study documenting over 200 ro

8、unds of VC financing,Kaplan and Stromberg2003find that a firm’s VC investors control the board 25%of the time, and the entrepreneurs control the board only 14%of the time.In the remaining firms,61%of their sample,neither

9、 the entrepreneurs nor the investors control the firm.Instead,control of the board is shared with third-party independent directors holding the tie-breaking votes.I focus on the incentives created by this form of shared

10、control.To model this arrangement,I consider a board with three directors:one entrepreneur,one investor,and one independent director. ID-arbitration has been overlooked by the financial contracting literature.The literat

11、ure treats control as“an indivisible right that can be held at any given time by only one arbitrationCrawford,1979,that the entrepreneur and investor have an incentive to converge towards the action most preferred by the

12、 independent director. Convergence to the independent director’s preferred outcome can reduce holdup by moderating each party’s expost threat position. Consequently, ID-arbitration can generate greater monetary returns t

13、han entrepreneur control, without exposing the entrepreneur to holdup by the investor. My analysis suggests a hierarchy of control rights. Firms should use entrepreneur control whenever possible. In some cases, however,

14、entrepreneur control may not provide enough verifiable revenues to give the investor his required rate of return. When this is the case, firms should first try to use ID-arbitration rather than investor control. However,

15、 in some instances investor control may be necessary, as it may be the only way to pledge sufficient monetary returns to ensure the investor’s participation. These predictions are consistent with empirical evidence from

16、VC contracts. Kaplan and Stromberg 2003,for example, find that VC-backed firms are more(less) likely to use ID-arbitration relative to entrepreneur control investor control when there is greater uncertainty regarding the

17、 project’s financial viability, and as additional funds are invested. This data is consistent with my model if we assume, as Kaplan and Stromberg do, that greater uncertainty increases the likelihood and magnitude of con

18、flicts between the entrepreneur and the investor. Furthermore, data on the appointment of independent directors shows that they are mutually selected by ‘unanimous consent’ of the firm’s entrepreneurs and VC inves

19、tors(Kaplan and Stromberg,2003;Broughman,2008),helping to ensure that an independent director’s interests are not captured by either party. This study relates to the incomplete contracting literature on the optimal allo

20、cation of control rights. Grossman and Hart(1986)show that decision rights can affect relation-specific investments and should be allocated to minimize underinvestment. Emphasizing a tradeoff between cash flows and priva

21、te benefits, Aghion and Bolton(1992)find that control should be awarded to the entrepreneur whenever possible; however, investor control may be necessary to satisfy the investor’s financing constraint The above papers ar

22、e complimented by a numberstudies,includingBerglof1994,Hellmann1998,2006,Dessein2005,Kirilenko2001,BlackandGilson1998,Marx1998,Schmidt2003,Yerramilli2006,andGompers1995,which focus on the allocation of control in VC-b