Initial Public Offerings and Optimal Corporate Governance

Do companies adopt optimal governance arrangements when they go public?  This question has been a hotly debated topic in corporate law and governance and one that I examine in a recent paper.

At the time of an initial public offering (IPO), a company offers a package of governance arrangements to the outside investors.  The arrangements include dual versus single class structure, staggered or un-staggered board, an exclusive forum provision (with respect to either corporate law or federal securities law claims), and robust or narrow shareholder rights with respect to nominating directors, calling special shareholder meetings, or having access to the … Read more