509 Posts Found

Managers, directors, and investors are all blamed for corporate missteps. David Larcker, who heads the School’s new corporate governance program, says GSB researchers are positioned to temper strong opinions with more facts.

Content: Article | Author: Deborah Lohse | Source: Stanford University | Subject: Corporate Governance

Compensation committees are under pressure to keep CEO pay high, even as shareholders and the media agitate for moderation. The solution? Boards of directors need better competitive information and an ear to what shareholders are saying, says Jay Lorsch.

Content: Article | Author: Jay W. Lorsch | Source: Harvard Business School (HBS) Working Knowledge | Subject: Corporate Governance

Potentially, boards have three resources to use: power, information, and knowledge. When these three resources are present and effectively directed at, first, handling emergencies; second, making sure an effective strategy is in place; and, third, truly influencing the decisions of the chief executive officer (and who succeeds the CEO), then we can say that the board is acting in a high-performance way. But there’s another … [ Read more ]

Content: Quotation | Source: Ivey Business Journal | Subject: Corporate Governance

Did you ever sit in the board meeting and watch the CEO’s facial expressions, imagining what he was thinking? You’re sure that he, along with every other CEO, would just as soon not have to spend the time dealing with a board. But he is savvy enough to mask such sentiments. Here is what we hear CEOs say behind the scenes. During their confidential conversations, … [ Read more ]

Content: Article | Authors: Lana J. Furr, Richard M. Furr, Ph.D. | Source: CEO Refresher | Subject: Corporate Governance

Most boards believe that rewarding managers through stock options is an effective incentive leading to long term shareholder value. Equity ownership, by definition, aligns managers and shareholders. But effective incentive implies a motivation to do something, as opposed to a simple desire to see the share price go up. Most senior executives, right up to the CEO, will tell you that movement in the stock … [ Read more ]

Content: Quotation | Source: Chief Executive | Subjects: Corporate Governance, Motivation

Stuart Greenbaum gave a very interesting and important speech at the Financial Intermediation Research Society Meetings in Shanghai China. Fortunately for those of who did not go to China to attend the conference, the keynote address is available through SSRN. The abstract does not do the speech justice, so Jim Mahar (FinanceProfessor.com) provides some “visual bites” via some “look-ins”:

Content: Article | Author: James Mahar Jr. | Source: FinanceProfessor.com | Subjects: Corporate Governance, Finance

Do CEOs deserve “star” compensation? The idea that CEO pay is driven by the invisible hand of market forces is a myth from which chief executives have long benefited, say Harvard professors Lucian Bebchuk and Rakesh Khurana.

Content: Article | Authors: Lucian A. Bebchuk, Rakesh Khurana | Source: Harvard Business School (HBS) Working Knowledge | Subject: Corporate Governance

Regulators often justify new disclosure regulation by arguing that it reduces firms’ cost of capital; until now, there has been little evidence to support this argument. Recent research examines how the effectiveness of a country’s legal institutions and securities regulation is related to international differences in the cost of equity capital.

Content: Article | Author: Christian Leuz | Source: Capital Ideas | Subjects: Corporate Governance, Finance

In purely top-down structures, key information and insights from below are often missed. Decisions take too long and are not as targeted and effective as they would be if information from front-line employees were taken into account.

But what governance system to use? Not a model based on consensus or democracy. Consensus often devolves into the least-common-denominator approach. People give in to what the largest egos … [ Read more ]

Content: Quotation | Source: strategy+business | Subjects: Corporate Governance, Management

This report from 1995 takes a look at research by five Stanford faculty members into executive compensation. Though some of the references are dated, the concepts aren’t.

Content: Article | Authors: Andrea Shepard, Charles O’Reilly, Edward Lazear, Jeffrey Zwiebel, Richard Lambert | Source: Stanford University | Subject: Corporate Governance

FinanceProfessor.com has a post discussing how useful the new FMA Online site is, specifically referencing a video by Professor Cliff Smith of the University of Rochester. Includes relevant links.

Content: Article | Author: James Mahar Jr. | Source: FinanceProfessor.com | Subjects: Corporate Governance, Finance

In most countries, the law gives the shareholder the power of hiring and firing the people who run the company. These powers were fine in the past, as long as the shareholder had a common purpose with the people who ran the company. But nowadays, in nine out of 10 cases the primary shareholders are managers of other corporate entities, with purposes and goals of … [ Read more ]

Content: Quotation | Source: strategy+business | Subject: Corporate Governance

This is a question more and more companies have been asking. Many of the traditional advantages of being public are no longer valid, and the mounting costs all the more obvious.

Content: Article | Author: Joseph Fuller | Source: Monitor Group | Subjects: Corporate Governance, Finance

Skeptics see little value in assessing the performance of individual directors. But these coauthors, experts in leadership and governance, say that correctly carried out, evaluations are highly valuable and provide a mechanism for the board and the CEO to hold each other accountable for clearly defined performance expectations.

Content: Article | Authors: Edward E. Lawler III, Jay Conger | Source: Ivey Business Journal | Subject: Corporate Governance

Hiring an outsider masks the hard truth that a company has not developed a pipeline of leaders from among its ranks who can step in and manage the bigger challenges of the day.

Content: Quotation | Source: Ivey Business Journal | Subjects: Human Resources, Succession Planning

It is now generally acknowledged that most boards need more directors who are truly independent. But the very fact that new directors are independent implies that they are, unwittingly and to a certain extent, uninformed about the company and its business. Which is why the quality of the information they get from the company must be very high.

Content: Article | Authors: Barry Reiter, Nicole Rosenberg | Source: Ivey Business Journal | Subject: Corporate Governance

Businesses in the Western world are still governed by antiquated corporation laws. In the past, employees were regarded as an adjunct to business; they were simply the “hands” to operate the machines. Power was concentrated at the top. The law gave priority to the shareholders, based on the assumption that the human elements were mere extensions of the capital assets.

Most of today’s corporations, however, have … [ Read more ]

Content: Quotation | Source: European Business Forum (EBF) | Subjects: Corporate Governance, Legal

If you have a great idea, you want to set up your own firm, make a quick buck and a swift exit, then the limited liability structure makes sense. If, however, you want to grow a successful company over the long term, you should steer clear of the classical limited liability formula – it gives too much power to too few people.

Content: Quotation | Source: European Business Forum (EBF) | Subjects: Corporate Governance, Legal

When did companies start awarding CEOs a small fortune once their company changed hands, and why? Harvard’s E. Bagley explains it all.

Content: Article | Author: Emily Thornton | Source: BusinessWeek | Subject: Corporate Governance

“More independent directors” and “separate the role of chairman and CEO” have become the rallying cries – and many believe, panaceas – that will lead to fixes for what’s wrong with corporate governance. The problem, argues this leading governance authority, is that independence and separation are not nearly as important as a director’s competence and behaviour, and how the directors on a particular board interact … [ Read more ]

Content: Article | Author: Richard LeBlanc | Source: Ivey Business Journal | Subject: Corporate Governance