Comment by dnomad | Hacker News Reader

Comment by dnomad | Hacker News Reader

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> More board members may increase intransigence, decrease oversight (cover over who is really making the decisions and who is not), and turn US corps more bureaucratic.

Take a look at the evidence in the real world (y'know, actual facts, not baseless speculation) and you will find strong indication that larger board sizes increase corporate performance.

> Boards beholden to current workers may sacrifice a lot of progress to keep things comfy, at the expense of future workers and jobs.

Again, this is the sort of thing that you could investigate by doing research of actual facts in the real world. You might start by looking at how German firms with significant worker board representation responded to reunification and Eastern Europe online. Hint: workers did not sacrifice future growth to keep their "comfy" wages.

> Obviously it "works" in germany, for some amount of "works," but it should need no explanation that US companies as a whole are able to move faster, and in high tech, often with higher wages(!!) than in Germany.

Like most "economic debates" in the US, I expect the debate around codetermination will be driven purely by ideology. There will be no serious review of the existing economic research and zero attempt to seriously investigate what works and doesn't work in any countries. What you'll get is just one side crying "Communist!" and the other side crying "Capitalist!" and there will be zero progress.

> Take a look at the evidence in the real world (y'know, actual facts, not baseless speculation) and you will find strong indication that larger board sizes increase corporate performance.

So you have statistical evidence that an increase to board size on day t is associated with greater excess stock returns on days > t?

Believe it or not you can actually look this up yourself. The impact of board size on corporate performance has been pretty thoroughly researched.

Yes, it has:

"One of the most consistent empirical relationships about boards of directors is that board size is negatively related to firm performance (Hermalin and Weisbach, 2003). Yermack (1996) finds a statistically significant negative relationship between board size and firm performance as measured by Tobin’s Q with a sample of 452 large U.S. industrial corporations for the period of 1984-1991. In the same study Yermack also exhibited that companies with small boards have more favorable values for financial ratios. Similarly Eisenberg, Sundgren and Wells (1998) concluded the negative relationship between firm board size and performance measured by return on assets (ROA) for a sample of 879 small private firms in Finland. In their 1998 study, Barhart and Rosenstein revealed that companies with fewer board members have superior performance compared to companies with crowded boards (...)"

https://www.researchgate.net/publication/321869618_The_Effec...

To be fair, I wonder how well these studies control for the well known negative relationship between firm size (as measured by, e.g., market cap) and excess returns, since firm size is presumably a confounding covariate of board size.

It's funny because you conveniently left out the fact that the single paper you quote finds no correlation.

The point here, as stated before, is not uncritically accept nonsense about board size because it validates your ideology and to look at actual research and evidence on the topic. At some point if you want to be taken seriously (at least outside of the US) you need to do more than appeal to your ideology du jour.

"conveniently"? You claim there is a positive correlation. A study finding no correlation goes against your position.

The point here, as stated before, is not uncritically accept nonsense about board size because it validates your ideology and to look at actual research and evidence on the topic.

Physician, heal thyself.

Right but your reply is equally disingenuous, adding a text snippet that is for your position but against the overall conclusion of the paper. The paper is also based on data from Turkish firms.

The whole thread is disingenuous, yes. The entire premise is that corporate governance is based off a dumb quote that's backed by zero evidence. The downvotes above just confirm how quickly these debates become ideological echo chambers. In America this just means people spouting neoliberal truisms like "unions will just raise wages!!1" which of course is nonsense as can be seen by the actual behavior of unions in Germany, Sweden and the auto-unions in the US. The point here is that there's no economic reason why workers in the US have such little power and are, except for the very top 1%, treated far worse than any other workers in the developed world. It is an ideological trap that has captured not just the US 1% but actually the US 99% too. This is not going to change any time soon. Given the relentless war on unions and the intense pro-corporate bias that exist at all levels of the American power structures, the obvious expectation is that US worker wages will continue to stagnate and ultimately fall in accordance with their actual economic negotiating power.

I don't have a position, I'm agnostic on the issue.

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