Sky Blog
The rise of shareholder activism has become a global phenomenon. Shareholder activists are not only present–as they started–in the US, but also in European and Asian Markets.[1] This situation has generated a vast literature about the desirability (or not) …
The corporate board is commonly seen as a crucial governance device that operates to both monitor corporate management and provide strategic advice. Recent corporate governance research has discovered a broad range of evidence of internal board monitoring and advisory activities; …
They say that one should not look a gift horse in the mouth. We decided to go against this proverb and look carefully in the mouth of one such gift horse. After all, we still remember from high school reading …
Because most outsiders learn about a firm from news articles written about it, firms have incentives to manage how they are covered by media so that they are presented in the most favorable light possible. Our study examines whether the …
A corporate inversion involves the relocation of a corporation’s legal domicile to a lower-tax nation (host country) while retaining its material operations in its higher-tax country of origin (home country). Corporations have been engaging in inversions for over three decades. …
There has been a recent surge in scholarship on the issue of concentration of power in the CEO, and the subsequent consequences for shareholder wealth maximization and board primacy. There is a general consensus among scholars that, in general, more …
Corporate governance scholarship has long considered the problems that arise in public companies with dispersed ownership. But the automaker Volkswagen does not suffer from a dispersed ownership structure. In fact, it has several strong and highly active owners. The Porsche …
Hedge fund activism is the latest rave in corporate governance. Activist hedge funds build stakes in target firms in order to press management for various changes. When managers are uncooperative, they may just be forced to step down. Lest you …
Options backdating? Who would be so arrogant to be still backdating their options? It has been exactly ten years since the Wall Street Journal’s exposé on “lucky CEOs.”[1] The intriguing question though is whether the executives could resist temptation …
A widely-held view in financial economics is that CEOs holding a non-diversified wealth portfolio tied to the firm are likely to be more risk-averse when making corporate decisions than what diversified shareholders would prefer. To reduce this divergence in attitude …
Many large firms – Google, Alibaba and Fitbit to name a few — have multiple voting share structures (MVS) in which the firm issues two or more classes of shares, one to the public and the other to insiders (typically …
In the paper “Intrapreneurship,” recently made available on SSRN, I turn my focus from startups/entrepreneurship to innovation inside large corporations, or intrapreneurship. I examine both traditional intrapreneurship, or innovation taking place inside large corporations, and corporate venture capital, where …
Are gender-balanced boards more active than non-gender balanced boards? I address this question in “Gender and Board Activeness: The Role of a Critical Mass”, forthcoming in the Journal of Financial and Quantitative Analysis. Using detailed minutes of …
Institutional Shareholder Services Inc. (ISS) recently issued, in the form of Frequently Asked Questions, a further update to its 2016 proxy voting guidelines to outline the types of management-sponsored proxy access provisions that ISS will deem responsive to shareholder-supported …
Since 2000, the financial world and global economy have been shaken by two catastrophic and entirely avoidable waves of financial scandals. At the turn of the millennium, accounting fraud at Enron, Worldcom, Tyco, and several other large enterprises rocked financial …
The US Federal Reserve (Fed) again expressed concerns about the culture at financial institutions this month.[1] This has been a recurring theme since the financial crisis, as regulators in the US and abroad have hit industry players with steep …
In a recently published book chapter,[1] I explore the prospects for corporate social responsibility (CSR) as a partial solution to the environmental sustainability challenge. Many large corporations affect the environment through their operational activities and their choices about product …
There is a frenzied rush for shareholders to get a new ‘right”, the right to put up their own nominees for board membership. Boards of directors, so goes a dominant opinion, are not to be fully trusted to pick the …
Invigorating the shareholder proposal process is a top priority for corporate governance reformers. But the possibility that self-interested shareholders could use proposals to harass or pressure managers to accommodate their interests is a cause for concern. Union shareholders attract more …
Fiduciaries manage significant assets held in university endowments, pension funds, charitable foundations, and private trusts. These fiduciaries have a duty of loyalty to the purposes and beneficiaries they serve and must comply with the prudent investor standard in making investment …