It is generally held that the choice of size and composition of the board of directors is endogenous to firm and recent theoretical models support this contention. This article focuses on the factors that might explain the size and composition of the board using a unique sample of the larger...

We argue that the cost to a family of holding a large block of shares in a company, or under-diversifying, is reflected in the diversification benefits that the family forfeits. These costs can be substantial. For example, given a constant relative risk aversion parameter of 2, the median cost...