Viral V. Acharya, Stewart C. Myers, and Raghuram G. Rajan
The common view of the public corporation is that of an organization run by top managers, and monitored by a board of directors on behalf of public shareholders. The separation of decision management (the CEO) from decision control (the board) and from risk-bearing constituents (public shareholders) is thought of as a reasonable way to structure firms, and so long as decisions are made in … [ Read more ]
Content: Quotation | Authors: Raghuram G. Rajan, Stewart C. Myers, Viral V. Acharya | Source: NYU Stern School of Business | Subject: Corporate Governance
Viral V. Acharya, Stewart C. Myers, and Raghuram G. Rajan
The traditional description of the firm – an organization run by top managers and monitored by a board of directors on behalf of public shareholders – falls short on three counts. First, control need not be exerted just top down, or from outside, it can also be asserted bottom-up. Put differently, the CEO has to give his subordinates a reason to follow, and this, implicitly, … [ Read more ]
Content: Quotation | Authors: Raghuram G. Rajan, Stewart C. Myers, Viral V. Acharya | Source: NYU Stern School of Business | Subjects: Corporate Governance, Organizational Behavior
Keeping the CEO in Line
Wayward chiefs are often brought to heel by the complex dynamics inherent in their companies’ structure, a phenomenon that can be called internal (rather than corporate) governance.
Content: Article | Authors: Raghuram G. Rajan, Stewart C. Myers, Viral V. Acharya | Source: NYU Stern School of Business | Subject: Corporate Governance
Bankers pay is deeply flawed
The typical manager of financial assets generates returns based on the systematic risk he takes – the so-called beta risk – and the value his abilities contribute to the investment process – his so-called alpha. Shareholders in asset management firms, such as commercial banks, investment banks and private equity or insurance companies are unlikely to pay the manager much for returns from beta risk. What … [ Read more ]
Content: Article | Author: Raghuram G. Rajan | Source: Financial Times | Subjects: Corporate Governance, Finance
Saving Capitalism from the Capitalists
Capitalism’s biggest problem is the executive in pinstripes who extols the virtues of competitive markets with every breath while attempting to extinguish them with every action.
Saving Capitalism from the Capitalists is a groundbreaking book that will radically change our understanding of the capitalist system, particularly the role of financial markets. They are the catalyst for inspiring human ingenuity and spreading prosperity. The perception of many, … [ Read more ]
Content: Book | Authors: Luigi Zingales, Raghuram G. Rajan | Subject: Economics