When it comes to an effective governance model, one size does not fit all. Context is paramount. Context is both endogenous and exogenous. Endogenous variables include complexity, asset base, competitive advantage, capital structure, quality of management, and board culture and leadership. Exogenous variables include industry structures, position in growth cycle, competitive force, macroeconomics (interest rate, commodity pricing), world supply and growth, political changes, and unforeseen … [ Read more ]
Content: Quotation | Author: Knud B. Jensen | Source: Ivey Business Journal | Subject: Corporate Governance
More and more firms today are including incentives for corporate social responsibility (CSR) in their executive compensation contracts. But is this a worthwhile practice? Who benefits from it? Recent research shows a link between CSR activities and better social performance and the bottom line. But is paying for CSR beneficial for shareholder interests? Accounting and stock-price performance incentives are already common in executive compensation contracts … [ Read more ]
Content: Article | Author: Bryan Hong | Source: Ivey Business Journal | Subjects: Corporate Governance, Social Responsibility
Duke professor Aaron Chatterji believes business leaders have social and political responsibilities they can’t afford to neglect.
Content: Thought Leader | Author: Aaron Chatterji | Source: strategy+business | Subjects: Corporate Governance, Social Responsibility
If your company cannot be great without you, it is not yet a great company. It is merely a group of people who happen to have a leader. The test as to whether it’s a great company is it doesn’t need you.
Content: Quotation | Author: Jim Collins | Source: Chief Executive | Subjects: Corporate Governance, Leadership, Management, Organizational Behavior
Despite strong pressures to focus on the short term, it is possible to manage for the long term and reap considerable rewards.
Content: Article | Authors: James Manyika, Sree Ramaswamy, Tim Koller | Source: McKinsey Quarterly | Subjects: Best Practices, Corporate Governance, Management, Strategy
Although activist investors are successful at improving margins, they struggle to drive growth. We analyzed 55 companies over the past 10 years in which shareholder activists had a significant impact on company governance and strategy, and compared their performance to that of their industry peers. (The aims of activist actions included business focus, board composition, business restructuring, director election, focus on growth, board representation, general … [ Read more ]
Content: Quotation | Authors: Joseph Duerr, Larry Jones | Source: strategy+business | Subjects: Corporate Governance, Economics, Finance
We assessed the early moves of CEOs with outstanding track records; some valuable lessons for leadership transitions emerged.
Content: Article | Authors: Kurt Strovink, Michael Birshan, Thomas Meakin | Source: McKinsey Quarterly | Subjects: Best Practices, Corporate Governance, Management
New CEOs typically raise the tempo of transactions at first, then the pace slows down. Is that costly?
Content: Article | Authors: Andy West, Michael Birshan, Thomas Meakin | Source: McKinsey Quarterly | Subjects: Corporate Governance, Management, Mergers & Acquisitions
If paying excessive CEO salaries is the most maligned use of corporate funds, stock buybacks may well take second place. Conventional wisdom is that CEOs buy back stock to manipulate the short-term stock price. They fund the buyback by cutting investment, and so firm value suffers in the long-term. As Senator Elizabeth Warren argued, “stock buybacks create a sugar high for the corporations. It boosts … [ Read more ]
Content: Article | Author: Alex Edmans | Source: Harvard Business Review | Subjects: Corporate Governance, Finance, Management, Strategy
When firms invest too heavily in buying back shares, there is likely to be trouble ahead.
Content: Article | Authors: Michael Olenick, Robert Ayres | Source: INSEAD Knowledge | Subjects: Corporate Governance, Finance, Management, Strategy
In May 2013, Ivey Business Journal published “Leadership Character and Corporate Governance,” which proposed that being an effective board member requires competencies, character and commitment. In that paper, which was also published by the Institute of Corporate Directors, we further noted that qualitative research indicates that character is the one fundamental requirement that poses the biggest challenge in terms of recruiting and selecting both directors … [ Read more ]
Content: Article | Authors: Alyson Byrne, Gerard H. Seijts, Jeffrey Gandz, Mary Crossan | Source: Ivey Business Journal | Subject: Corporate Governance
Long-standing directors and outliers alike could benefit from a crash course in the fundamentals of well-run boards. This was the subject of a roundtable discussion held in February 2017 as part of the INSEAD Directors Forum on the Asia campus. As discussion leader, I gave the participants a basic quiz designed to prompt reflection about how their board applies basic governance principles. It occurred to … [ Read more ]
Content: Article | Author: Noelle Ahlberg Kleiterp | Source: INSEAD Knowledge | Subject: Corporate Governance
Junk science has overwhelmed the thoughtful process of clarifying the role and processes of a successful board. And it has spawned more than a cottage industry. Governance has become a major sector supported by investment funds, consultants, university training programs, provincial and federal governments and institutions. Unfortunately, most of this activity is driven by a fad in management theory, which will eventually fade away like … [ Read more ]
Content: Article | Author: Knud B. Jensen | Source: Ivey Business Journal | Subject: Corporate Governance
When a board of directors announces the departure of a CEO and the hiring of an executive search firm to identify a successor, the board members are also announcing that they have failed at succession planning.
Content: Quotation | Authors: Gary L. Neilson, Ken Favaro, Per-Ola Karlsson | Source: strategy+business | Subject: Corporate Governance
Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. However, rigorous, peer-reviewed academic research paints a different picture. Despite the intuitive appeal of the argument that gender diversity on the board improves company performance, research suggests otherwise.
Results of numerous academic studies of the topic suggest that the presence of more … [ Read more ]
Content: Article | Author: Katherine Klein | Source: [email protected] | Subjects: Corporate Governance, Women in Business
To help CEOs and board chairs, as well as executives and directors, build strong boards, this CEO guide synthesizes multiple sources to make quick sense of complex issues in corporate governance, while focusing on four areas that are essential for building a better board.
Content: Article | Source: McKinsey Quarterly | Subject: Corporate Governance
New CEOs are faced with a bewildering array of choices, so it’s crucial for them to take a data-driven look at potentially major moves—and to know when to make them.
Content: Article | Authors: Allen Webb, Michael Birshan, Thomas Meakin | Source: McKinsey Quarterly | Subject: Corporate Governance
With a higher degree of digital fluency, boards can help C-suite leaders make better decisions about how to expand a company’s most successful technology initiatives and when to pull the plug on lagging ones. In our experience, board directors are more likely to gain such fluency if they routinely ask these five critical questions relating to the IT organization’s performance.
Content: Article | Authors: Aditya Pande, Christoph Schrey | Source: McKinsey Quarterly | Subjects: Corporate Governance, IT / Technology / E-Business
The amount of time board directors spend on their work and commit to strategy is rising. But in a new survey, few respondents rate their boards as effective at most tasks or report good feedback or training practices.
Content: Article | Authors: Conor Kehoe, Frithjof Lund, Nina Spielmann | Source: McKinsey Quarterly | Subject: Corporate Governance
Research shows what happens to succession winners and losers.
Content: Article | Authors: Shana Lynch, Tricia Seibold | Source: Stanford University | Subjects: Corporate Governance, Succession Planning