A Lawyer’s Guide to Empirical Corporate Governance

Debates about corporate governance ultimately rest on empirical studies that evaluate whether a particular type of governance enhances shareholder value. In recent years, lawyers have increasingly engaged with these studies, by either criticizing or praising them, and given them greater publicity. Likewise, judges in cases involving corporate governance matters such as anti-takeover devices and fiduciary duties have cited those studies when assessing the consequences of different governance mechanisms for firm value. The challenges for lawyers are that, first, many of them are not trained in statistical methods and econometrics and, second, many empirical studies reach conflicting results. Accordingly, it is … Read more