Few areas of business stir up more controversy than private equity. Critics slam private equity firms for destroying companies by layering on debt, firing employees, and cutting costs at every opportunity. Proponents, on the other hand, respond that any changes they make to companies are painful but necessary to improve the inefficient companies that they acquire—and they dispute the charges about destroying jobs.
In The Public Cost of Private Equity, I explore a different, and potentially more worrisome, aspect of private equity: its corporate governance structure. While less visible to outside observers, corporate governance plays a critical role in … Read more