In this paper, we reveal an overlooked but important role of corporate governance on investment efficiency: non-CEO executives. Internal governance, measured as the fraction of independent executives appointed before the current CEO, leads to a better investment efficiency. The governance effect is pronounced when executives have stronger incentives, such as a longer horizon or a higher shareholding ratio. To explain the promotion of investment efficiency, we find that independent executives help constrain CEO power. They also contribute to better quality of accounting information. Moreover, internal governance by non-CEO executives is hardly affected by external supervisors, and other internal governance mechanisms fail to enhance firms' investment efficiency, indicating the unique monitoring role of independent non-CEO executives. Our study demonstrates the significance of a democratic management team and the necessity to limit the power of CEOs to appoint new executives.

中文翻译：

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内部治理和投资效率：非 CEO 高管的作用


在本文中，我们揭示了公司治理对投资效率的一个被忽视但重要的作用：非 CEO 高管。内部治理，以现任 CEO 之前任命的独立高管的比例来衡量，可以提高投资效率。当高管有更强的激励措施时，例如更长的期限或更高的持股比例，治理效应就会很明显。为了解释投资效率的提升，我们发现独立高管有助于限制 CEO 的权力。它们还有助于提高会计信息的质量。此外，非 CEO 高管的内部治理几乎不受外部监管者的影响，其他内部治理机制无法提升企业投资效率，彰显了独立非 CEO 高管独特的监督作用。我们的研究表明了民主管理团队的重要性以及限制首席执行官任命新高管的权力的必要性。