Sky Blog
Do you know the difference between “carbon neutral” and “net zero”? If not, you have plenty of company. In a new paper, we show that few people can distinguish between these and similar terms and find that, while providing more …
In a recent article, we explore the curious case of how regulators in the EU, UK, and United States treat two forms of insider trading — what we call “traditional insider trading” and “shadow trading.” The former, familiar to …
Firms’ green claims have become ubiquitous in recent years. Products are “recycled” or “responsibly sourced,” financial instruments are “green” or “ESG,” firms promise to become “carbon neutral” or “net-zero,” and so on. But can the recipients of such claims assess …
The debate on corporate purpose is often grounded on an assumption that there is one right model of corporate purpose for all companies. Yet some companies have a much more significant impact on stakeholder groups than others. Just 90 corporations, …
Corporate insiders engage in “shadow trading” when they use private information about their own firm to trade in the shares of economically connected companies such as suppliers, customers, or competitors. While legal scholars have long recognized that shadow trading can …
Mark Zuckerberg has virtually all his personal wealth invested in Meta Platforms (formerly Facebook). His incentives as controller of Meta are thus clear: Maximize firm value and private benefits of control, irrespective of the effect that might have on other …
The traditional view of corporate law can be summarized as follows. Shareholders have a single well-defined objective, namely “to maximize the net present value of the firm’s earnings per dollar invested” (Hansmann, 283). Managing companies in the interest …
In a new article, I use network theory to show that there is a hidden link between insider trading and macroeconomic risk. I suggest that current laws on insider trading increase the level of macroeconomic risk for the economy, and …
Shocks to only part of the financial system, such as the collapse of the subprime mortgage market in 2007, can spread and intensify through the complex interconnections among financial and non-financial institutions to become systemic threats. The consequences can be …
It is received wisdom that institutional investors have insufficient incentives to cast informed votes because they compete on relative performance. If BlackRock invests in the monitoring of one of its portfolio companies, it will become relatively less competitive vis-à-vis the …