Over the past three decades, there has been increasing concern about how corporate governance structures such as classified boards and dual class stock entrench managers, reduce director effectiveness, and reduce firm value. Likely as a result, mature firms have increasingly eliminated these structures. While almost 60 percent of S&P 1500 companies had classified boards in the 1990s, only 35 percent had them in 2017. The percentage of companies with dual class shares has also dropped, from 12 percent of the S&P 1500 in the 1990s to 7 percent in 2017.
Strikingly, newly public firms’ structures have moved in the opposite … Read more