The Culture of the Finance Profession: Evidence from the 2020/2021 American Finance Association Survey

In 2017, the board of AFFECT (the Academic Female Finance Committee) proposed that the AFA carry out a professional culture survey. Some key...

Identifying the Effect of Managerial Control on Firm Performance

Using a unique sample, we attempt to identify the consequence of the separation between inside ownership and control for firm performance. We exploit...

Regulatory Pressure and Bank Directors' Incentives to Attend Board Meetings

The primary way in which directors obtain necessary information is by attending board meetings. Bank directors, in particular, are strongly urged to...

Women in Finance

Across countries, banks have less gender diverse boards than other firms. Bank board diversity is particularly low in countries with greater gender...

Governance and the Financial Crisis

Should boards of financial firms be blamed for the financial crisis' Using a large sample of data on nonfinancial and financial firms for the period...

Asking Directors About Their Dual Roles

This paper uses a large survey of directors to investigate variation in directors' dual roles as advisors and monitors of management. I examine whether...

The Role of Boards of Directors in Corporate Governance: A Conceptual Framework & Survey

This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Hermalin and Weisbach (2003) survey....

A Theory of Friendly Boards

This paper analyzes the consequences of the board's dual role as an advisor as well as a monitor of management. As a result of this dual role, the CEO faces a...

Managers, Workers, and Corporate Control

If management has high private benefits and a small equity stake, managers and workers are natural allies against takeover threats. Two forces are at...

Corporate Fraud, Governance and Auditing

COVID-19 and Corporate Finance

We distill evidence about the effects of COVID-19 on companies. Stock price reactions to the shock differed greatly across firms, depending on their...

Financial Disclosure and Market Transparency with Costly Information Processing

Generalists versus Specialists: Lifetime Work Experience and CEO Pay

We show that pay is higher for CEOs with general managerial skills gathered during lifetime work experience. We use CEOs’ résumés of S&P 1,500...

Career Risk and Market Discipline in Asset Management

We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on...

Emergency Measures for Equity Trading: The Case Against Short-Selling Bans and Stock Exchange Shutdowns

After the Covid-19 crisis struck, equity prices abruptly plunged across the world. The clear prospect of an almost unprecedented decrease in supply and...

Climate Risk, Bank Lending and Monetary Policy

Combining euro-area credit register and carbon emission data, we provide evidence of a climate risk-taking channel in banks’ lending policies....

What Matters and for Which Firms for Corporate Governance in Emerging Markets? Evidence from Brazil (and Other BRIK Countries)

A central issue in corporate governance research is the extent to which “good” governance practices are universal (one size mostly fits all) or...

The Relation between Firm-Level Corporate Governance and Market Value: A Study of India

Relatively little is known about the corporate governance practice of firms in emerging markets. We provide a detailed overview of the practices of...

Why Does Corporate Governance Affect Firm Value: Evidence on a Self-Dealing Channel from a Natural Experiment in Korea

Prior work in emerging markets provides evidence that better corporate governance predicts higher market value, but very little on the specific...

Outside Director Liability Across Countries

Settlements reached in 2005 in securities litigation involving Enron and WorldCom highlighted the financial risks faced by outside directors of...

Methods for Multicountry Studies of Corporate Governance (and Evidence from the BRIKT Countries)

We discuss empirical challenges in multicountry studies of the effects of firm-level corporate governance on firm value, focusing on emerging...

The SEC's Short-Sale Experiment: Evidence on Causal Channels and on the Importance of Specification Choice in Randomized and Natural Experiments

During 2005-2007, the Securities and Exchange Commission (SEC) conducted a randomized trial in which it removed short-sale restrictions from...

Private Enforcement of Corporate Law: An Empirical Comparison of the UK and US

It is often assumed that strong securities markets require good legal protection of minority shareholders. This implies both "good" law -- principally...

Hedge Funds, Insiders, and the Decoupling of Economic and Voting Ownership: Empty Voting and Hidden (Morphable) Ownership

Most U.S. public companies have a single class of voting common shares: voting power is proportional to economic ownership. Linking votes to shares is...

International Corporate Governance Spillovers: Evidence from Cross-Border Mergers and Acquisitions

We test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country. Using firm-level data from 64...

Generalists versus Specialists: Lifetime Work Experience and CEO Pay

We show that pay is higher for CEOs with general managerial skills gathered during lifetime work experience. We use CEOs’ résumés of S&P 1,500...

Leviathan Inc. and Corporate Environmental Engagement

In a 2010 special report, The Economist magazine termed the resurgence of state-owned, publicly listed enterprises “Leviathan Inc.” and...

Foreign Investor Activism in Japan: The First Ten Years

Do Responsible Investors Invest Responsibly?

We study whether institutional investors that sign the Principles for Responsible Investment (PRI), a commitment to responsible investing, exhibit...

Do General Managerial Skills Spur Innovation?

We show that firms with chief executive officers (CEOs) who gain general managerial skills over their lifetime work experience produce more patents. We...

Does Governance Travel around the World? Evidence from Institutional Investors

We examine whether institutional investors affect corporate governance by analyzing portfolio holdings of institutions in companies from 23...

Corporate Governance in the Recent Financial Crisis: Evidence from Financial Institutions Worldwide

Can Staggered Boards Improve Value? Causal Evidence from Massachusetts

Staggered boards (SBs) are one of the most potent common entrenchment devices, and their value effects are considerably debated. We study SBs'...

The Systemic Governance Influence of Universal Owners: Evidence From an Expectation Document

We examine expectation documents’ effectiveness as an activism tool. We use as a natural experiment, the unforeseen release by the Norwegian...

Governance through Shame and Aspiration: Index Creation and Corporate Behavior

After decades of de-prioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX-Nikkei400 in 2014. The...

The European Commission's Sustainable Corporate Governance Report: A Critique

In July 2020, the European Commission published the “Study on directors’ duties and sustainable corporate governance” by EY. The Report...

Price and Probability: Decomposing the Takeover Effects of Anti-Takeover Provisions

This paper studies the effects of anti-takeover provisions on takeovers and identifies the channels through which they create or destroy value for...

Stock Investors' Returns are Exaggerated

The stock market generates less wealth than it appears. We show that total shareholder return (TSR), the standard measure of stock investor...

Short-Termism and Capital Flows

During 2007-2016, S&P 500 firms distributed to shareholders $7 trillion via buybacks and dividends, over 96% of their aggregate net income,...

Say Pays! Shareholder Voice and Firm Performance

This paper estimates the effects of Say-on-Pay (SoP); a policy that increases shareholder ?voice? by providing shareholders with a regular vote on...

Governance Under Common Ownership

Conventional wisdom is that diversification weakens governance by spreading an investor too thinly. We show that, when an investor owns multiple firms...

Who’s Paying Attention? Measuring Common Ownership and Its Impact on Managerial Incentives

We derive a measure that captures the extent to which common ownership shifts managers’ incentives to internalize externalities. A key feature of the...

Directors’ Duties and Legal Safe Harbours: A Comparative Analysis

Directors’ duties are a core element of corporate governance, yet a range of legal safe harbours ultimately shape the contours and stringency of these...

Good Activist/Bad Activist: The Rise of International Stewardship Codes

This paper focuses on recent trends in shareholder participation in corporate governance in a number of major developed countries. Conflicting...

The Trajectory of American Corporate Governance: Shareholder Empowerment and Private Ordering Combat

Why are shareholder empowerment and activism such controversial issues in the United States today? Other common law jurisdictions, including the...

Irrelevance of Governance Structure

Does corporate governance structure matter for firm value? We develop a model in which the allocation of control rights between shareholders and...

The Protection of Investors and the Compensation for their Losses: Australia

The concept of ‘investor protection’ has a long-standing legal pedigree in relation to the business corporation. Since the early 20th century,...

The Voting Premium

This paper develops a unified theory of blockholder governance and the voting premium. It explains how and why a voting premium emerges in the absence of...

The Law and Finance of Anti-Takeover Statutes

Lawyers and financial economists have fundamentally different views of anti-takeover statutes. While corporate lawyers and academics generally...

The Party Structure of Mutual Funds

We investigate the structure of mutual funds’ corporate governance preferences as revealed by how they vote their shares in portfolio companies. We...

Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes U.K. Focus Fund

This article reports a unique analysis of private engagements by an activist fund. It is based on data made available to us by Hermes, the fund manager...

The Privatization of Bankruptcy: Evidence from Financial Distress in the Shipping Industry

A generally accepted view is that sophisticated bankruptcy procedures are required to mitigate coordination failures and fire sale discounts arising...

The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008

The standard narrative of the meltdown of Bear Stearns and Lehman Brothers assumes that the wealth of the top executives of these firms was largely wiped...

Hedge Fund Activism in Europe

The paper analyzes 362 European activist interventions by hedge funds, focus funds and other activist investors from 2000 to 2008. The sample includes...

Will Corporations Deliver Value to All Stakeholders?

Supporters of stakeholder governance advocate relying on corporate leaders to use their discretion to protect stakeholders, and they seem to take...

Corporate Governance Through Voice and Exit

How do active managers engage with portfolio firms? And, what role does monitoring and engagement play in their trading decisions? We use proprietary...

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

Index funds own an increasingly large proportion of American public companies. The stewardship decisions of index fund managers—how they monitor,...

Evolution of Ownership and Control Around the World: The Changing Face of Capitalism

This chapter documents the evolution of ownership and control of firms around the world over a hundred year period from the beginning of the 20th century...

Survival and Conglomerate Value

This paper shows how a selection bias generates an apparent value reduction for firms that survive longer in the sample. We test our model on conglomerate...

Leverage and Value Creation in Holding-Subsidiary Structures

This paper determines optimal capital structure and value of Holding-Subsidiary structures (HS), when there is a trade-off between bankruptcy costs...

Taxes, Ownership and Capital Structure

This paper studies the ownership connection between two units that share a common controlling entity. Our results generate diverse organizations,...

Corporate Litigation, Governance, and the Role of Law Firms

Corporations pay out large settlements to their shareholders and other plaintiffs as compensation for corporate governance failures. Hired to...

Socially Responsible Firms

In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The...

U.S. Securities Regulation in a World of Global Exchanges

Recently there has been a dramatic change in the organizational structure of exchanges as they have demutualized and converted into for-profit...

The Investment Behavior of Buyout Funds: Theory and Evidence

Liquidity and Governance

Is greater trading liquidity good or bad for corporate governance? We address this question both theoretically and empirically. We solve a model...

The Incredible Shrinking Stock Market: On the Political Economy Consequences of Excessive Delistings

Over the past two decades, the U.S. stock market has halved in size as the "public firm model" has begun to fall out of favor. We develop a political economy...

Does the Stock Market Harm Investment Incentives?

Busy Directors: Strategic Interaction and Monitoring Synergies

We derive conditions for when having a "busy" director on the board is harmful to shareholders and when it is beneficial. Our model allows directors to...

Monitoring Managers: Does it Matter?

We study how well-incentivized boards monitor CEOs and whether such monitoring improves performance. Using unique, detailed data on boards’...

Activism, Strategic Trading, and Liquidity

We analyze dynamic trading by an activist investor who can expend costly effort to affect firm value. We obtain the equilibrium in closed form for a...