The Impact of CEO Tenure on Cooperative Governance

This paper investigates whether long‐tenured cooperative chief executive officers (CEOs) are successful in negotiating less monitoring, resulting in the cooperative being agent driven. Utilizing a sample of the 1000 largest US agricultural cooperatives, we examine whether boards of long‐tenured CEOs exhibit differences in composition, formal committees, or procedures that may indicate these boards are more lenient monitors. We find long‐tenured CEOs experience less board monitoring. This result is primarily due to a difference in procedural mechanisms, rather than board composition. However, it is unclear whether monitoring leniency is an indication of the CEO's ability to negotiate less monitoring. It remains a possibility that CEOs with shorter tenures also influence the board; but their recommendations may be heavily influenced by non‐compulsory conformance with stricter corporate governance regulations.