| Summary: | We model and experimentally examine the board structure{ performance relationship.We examine single-tiered boards, two-tiered boards, insider-controlled boards, and outsider-controlled boards. We nd that even insider-controlled boards frequently adopt institutionally preferred rather than self-interested policies. Two-tiered boards adopt institutionally pre- ferred policies more frequently but tend to destroy value by being too conser- vative, frequently rejecting good projects. Outsider-controlled single-tiered boards, both when they have multiple insiders and only a single insider, adopt institutionally preferred policies most frequently. In those board de- signs where the effcient Nash equilibrium produces strictly higher payos to all agents than the coalition-proof equilibria, agents tend to select the effcient Nash equilibria.
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