Watchdog or Lapdog? A Behavioral View of the Media as a Corporate Governance Mechanism

This study begins to provide a behavioral view of the media and corporate governance by showing how firms enact largely symbolic governance changes with respect to board independence that essentially protect managerial interests, yet still elicit positive responses from the media. I show why this media response is important for firm leaders by examining how more favorable media coverage may affect CEO job security, executive compensation, and board composition. To the extent that largely symbolic actions affect media coverage, this study raises questions about the effectiveness of the media as a governance control mechanism.