Sky Blog
In recent years, demand for companies to promote environmental, social, and governance (“ESG”) values has increased dramatically. Investment in ESG-oriented mutual funds (green funds), rose globally by 53 percent in 2021 to $2.7 trillion (Kishan, 2022). Bloomberg forecasts…
Headlines during earnings season often focus on the forward-looking guidance corporate managers provide. Yet, questions remain about managers’ perceptions of the guidance process and the tradeoffs they face in deciding whether and what to guide. To gain greater insight, we …
American workers are more productive than ever, but they take home the same pay they did 40 years ago. While firms have enjoyed blockbuster profits—and the U.S. gross domestic product has tripled—most American households have not shared in this increasing …
In a new article, I build upon the paradox of ownership. My central thesis is that those who own are not always in control; therefore, those who control should be held accountable like the owners would if they were …
Research in finance and accounting consistently documents that a significant number of managers overstate reported earnings when true earnings miss a benchmark [1]. Managers face strong incentives to meet and beat important earnings thresholds, such as the analyst consensus forecast …
A large stream of literature in economics, finance, and accounting suggests that managers’ decisions are influenced by their labor market prospects. Absent perfect information about managers’ ability, the labor market often takes a firm’s current and past performance as a …
We investigate whether the use of humor during public earnings conference calls influences the content and outcomes of the calls. Earnings releases are key events for corporations and the investors and analysts who follow them. In conjunction with the earnings …
“When you talk, you are only repeating what you already know. But if you listen, you may learn something new.” – Dalai Lama XIV
Disclosure regulation is a cornerstone of modern securities markets. Its economic consequences have been extensively studied …
Corporate governance literature has largely focused on listed firms with dispersed ownership, but those with controlling stockholders are increasingly important in the United States and Europe. In the U.S., the likes of Google, Facebook, and other technology firms have gone …
The separation of corporate ownership from control leads to an agency problem caused by the divergent interests of shareholders (the principals) and management (the agent). One area of contention is the level of risk-taking by the firm. Managers’ investment in …
In recent years, executive compensation in the U.S. has become a hotly debated issue. A central point of contention is peer benchmarking, an integral part of the pay-setting process in which firms compare their executives’ compensation with that of rivals …
Excessive risk-taking by corporate executives is often blamed for triggering the financial crisis of 2008. Therefore, it is crucial to understand the nature of corporate risk-taking so as to prevent, or reduce the likelihood of, a future crisis. In theory, …
Perhaps not since the early 20th century has there been so much outrage about the malfeasance of the large corporation, and particularly the relationship of senior managers to such conduct. The sentiment is understandable. In reckoning with the wrongs of …
The fluidity of labor markets depends on the ease with which one side of the market can fulfill the needs of the other: whether workers can find employment that suits their skills and firms can find adequate substitutes for workers …
The news media are an important source of information for the U.S. capital markets, especially when drawing attention to questionable behavior of corporate executives. Coverage can, however, pressure companies into making dubious financial decisions like emphasizing short-term earnings over long-term …
In an article to be published in the Minnesota Law Review, I use systems-strategic analysis to explore the role of charter competition in corporate law. A systems-strategic analysis begins by identifying a law-related system for study, then describes how the …
Corporate governance has become even more important since the collapse of major firms in the 1990s and the global financial crisis of 2007-2008, and the relationship between financial reporting and the capital markets is a big reason why. The debate …