Found 33 article(s) for author 'Corporate Governance'

The Law, Corporate Governance, and Economic Justice

The Law, Corporate Governance, and Economic Justice. Mark Roe, September 26, 2019, Paper, “The Chief Justice of the Delaware Supreme Court begins by invoking the New Deal, and expressing admiration for the way its goals and some of its social programs have been put into practice by Northern European social democracies. Most important are their protections for workers and the unemployed—protections the Judge finds deplorably absent in U.S. law and corporate labor practices. Nevertheless, when contemplating how corporate boards in the U.S. might respond to the growing demand for U.S. public companies to address social problems like the environment and economic inequality, the Delaware judge falls back on the prescription of Adolph Berle, who, though one of the framers of the New Deal, insisted that companies “stick to their knitting” by putting shareholders first as the only way of ensuring the accountability of corporate managements and boards.Link

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Procedural Justice and the Risks of Consumer Voting

Procedural Justice and the Risks of Consumer Voting. Leslie John, Michael I. Norton, 2019, Paper, “Firms are increasingly giving consumers the vote. Eight studies demonstrate that when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers react negatively when violated: representation (Experiments 1A–1C); consistency (Experiment 2), and non-suppression (Experiment 3). However, when firms honor these implicit promises, voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks.Link

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The Politics of CEOs

The Politics of CEOs. Alma Cohen, May 2019, Paper, “This paper is part of the work of the Project on Corporate Political Spending of the Harvard Law School Program on Corporate Governance. We would like to thank Lucian Bebchuk and Itay Saporta for valuable comments and discussions. We have also benefitted from invaluable research assistance by Shay Acrich, Omer Braun, Zoe Piel, and Ewelina Rudnicka. We gratefully acknowledge the financial support of the John M. Olin Center for Law, Economics, and Business and the Program on Corporate Governance at Harvard Law School, the Israel Science Foundation, and Tel-Aviv University. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.Link

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Jesse Fried on Inequality, Stock Buybacks, and Misplaced Fears about Short-Termism in Corporate Governance

Jesse Fried on Inequality, Stock Buybacks, and Misplaced Fears about Short-Termism in Corporate Governance March 2019. GrowthPolicy’s Devjani Roy interviewed Jesse Fried, Dane Professor of Law at Harvard Law School, on inequality, stock buybacks, and misplaced fears about short-termism in corporate governance. | Click here for more interviews like this one. Links: Jesse Fried’s faculty […]

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Managerial Control and Executive Compensation

Managerial Control and Executive Compensation. F.M. Scherer, February 9, 2019, Paper, “This article analyzes the trajectory and causes of the explosion of American corporate CEOs’ compensation relative to that of average workers between 1958 and 2017. The historical data are presented and analyzed in more detail for 2016 and 2017. Important biases in alternative data sets are explored. Alternative hypotheses for the dramatic changes over time are proposed but not resolved. Among other things, the paper investigates the role of tax and other government policy changes and regulation-induced innovations in the organization of executive pay determination.Link

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Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy

Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy. Lucian Bebchuk, November 28, 2018, Opinion, “Index funds own an increasingly large proportion of American public companies, currently more than one fifth and steadily growing. Understanding the stewardship decisions of index fund managers—how they monitor, vote, and engage with their portfolio companies—is critical for corporate law scholarship. In a study that we recently placed on SSRN—Index Funds and the Future of Corporate Governance: Theory, Evidence and Policy—we seek to contribute to such understanding by providing a comprehensive theoretical, empirical, and policy analysis of index fund stewardship.Link

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Revisiting the uneasy case for corporate taxation in an uneasy world

Revisiting the uneasy case for corporate taxation in an uneasy world. Mihir Desai, October 31, 2018, Paper, “Just as the public increasingly wants corporate taxation to serve as a mechanism for ensuring that business contributes to society, the sustainability of corporate taxation is increasingly under challenge by a changing global landscape. This tension between the heightened demands placed on the corporate tax system and its reduced capacity prompts the question: How can an increasingly tenuous fiscal instrument be modified to accommodate rising expectations? In this paper, we address this question by reviewing the empirical evidence on, and conceptual underpinnings of, the corporate tax. We place the taxation of corporations in a wider context that links it to ongoing debates on corporate law and governance and on corporate social responsibility.Link

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What Would It Take to Get Businesses to Focus Less on Shareholder Value?

What Would It Take to Get Businesses to Focus Less on Shareholder Value? Rebecca Henderson, August 21, 2018, Opinion, “Last week, Massachusetts Senator Elizabeth Warren announced that she’s about to propose the most significant change in U.S. corporate governance in 100 years. We don’t yet have the full details, but one reading of her piece is that she’s going to propose requiring every company with more than $1 billion in revenue to become a “benefit corporation” — a corporation whose fiduciary duty is not only to its shareholders but to all its major “stakeholders.”Link

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Do Founders Control Start-Up Firms that Go Public?

Do Founders Control Start-Up Firms that Go Public? Jesse Fried, May 2018, Paper, “Startup founders, who generally must cede control to obtain VC financing, are widely believed to regain control in the event of an IPO, à la Facebook’s Mark Zuckerberg. Indeed, the premise that founders expect to be able to reacquire control if there is an IPO underlies the leading finance theory for why venture capital cannot thrive without a robust stock market. But little is known about how frequently founders regain control via IPO. Using a sample of over 18,000 VCbacked firms, we show that founders generally do not reacquire control via IPO. In almost 60% of firms that go public, the founder is no longer CEO at IPO.Link

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