Credentials Matter, but Only for Men: Evidence from the S&P 500

Gender diversity in the boardroom and the C-suite is one of the most contentious topics in corporate governance. Proponents of greater diversity argue that the lack of women directors and top executives is a missed opportunity and that increasing their numbers will improve corporate governance, and ultimately, increase shareholder value. Efforts toward that goal have included State Street’s “Fearless Girl” campaign, California’s two board-diversity statutes, and the recently approved NASDAQ rule. Many opponents of these measures stress that they don’t oppose diversity per se, but argue that there is a shortage of qualified women. As a … Read more

Legal Insider Trading Profits Often Amount to Peanuts

How much do corporate insiders make on their trades? It has long been shown that insiders realize significant positive abnormal returns on their transactions, in percentage terms. Surprisingly, however, there has been little research examining insiders’ dollar profits, even though it is dollar profits, rather than percentage returns, that insiders themselves likely care about.

Why is it important to make this distinction? Even if insiders realize high percentage returns, they may trade small amounts or trade infrequently, so that overall profits are still small. Conversely, even small percentage returns may lead to high profits if an insider trades large … Read more