Journal of Finance
Contrary to conventional wisdom, classified boards remain prevalent, with their usage varying across a firm’s life cycle based on the decade of maturity or IPO year. Firms rarely removed classified boards in the 1990s, but declassification became more common in later decades due to lower collective action costs, increased innovation-related investments, rising institutional ownership, and greater governance scrutiny.
Feng (Jason) Guo is the Dean’s Fellow in Accounting and an associate professor of accounting. His paper is published in the Journal of Finance.