Boards of directors have abdicated to government regulators responsibility for overseeing senior management, according to a study by Federal Reserve Bank of Dallas economist Stephen Prowse.

Mr. Prowse finds that only 1.7% of bank holding companies were the victims of hostile takeover attempts, compared with 7.8% of manufacturing firms. The low number of hostile takeovers means the market is not disciplining underperforming corporate managers, he concludes.

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