Dual entrenchment and tax management: Classified boards and family firms

Jared A. Moore, Sang Hyun Suh, Edward M. Werner

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


This study examines whether and how multiple managerial entrenchment devices within a firm, specifically the structure of the board of directors and family firm status, interact to influence tax management. Using a sample of 4,000 U.S. public firm-year observations covering the period 1999–2013, we find that the classified board structure and family firm status are both negatively related with tax avoidance. However, accounting for the interaction between board structure and family firm status, we also find that the negative associations between both entrenchment measures and tax management apply only where the other entrenchment mechanism is absent. In further analysis, we find that higher levels of monitoring by institutional investors neutralize the interaction between the presence of a classified board and family firm status. Our evidence highlights that governance/monitoring mechanisms can interact in complex ways, including an offsetting effect between potentially redundant dual-level entrenchment mechanisms, to influence tax management behavior.

Original languageAmerican English
Pages (from-to)161-172
Number of pages12
JournalJournal of Business Research
StatePublished - Oct 2017
Externally publishedYes

ASJC Scopus subject areas

  • Marketing


  • Classified boards
  • Entrenchment
  • Family firms
  • Institutional investors
  • Tax avoidance
  • Tax management


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