Firms governed by politically conservative boards of directors pay their CEOs more money than do firms with more liberal-leaning (the ideological left in the US) boards. That’s the conclusion of our new study on the impact of political ideology in the boardroom. We also find an ideological disparity in the degree to which directors weigh recent firm performance when deciding […]
The New York Times building, by Haxorjoe, under a CC-BY-SA-3.0 licence
Firms that are more visible in the press are better governed and more profitable. But investors underestimate the value of visibility and could profit from investing into high-visibility firms.
In our study, ‘The Value of Visibility’, we analyse 90 years of The New York Times’ coverage of more than 22,000 publicly listed US […]
Money laundering, by The Preiser Project, under a CC-BY-2.0 licence
A series of recent news events have highlighted the continued focus of global regulators on money laundering and compliance failures at international financial institutions — and made it clear this focus is only likely to intensify in the months ahead. This makes it more crucial than ever that institutions have the […]
Silicon Valley from above, by Patrick Nouhailler, under a CC-BY-SA-2.0 licence
Corporate governance scholars have long argued that a board of directors can serve a legitimising role for their organisation. But strong CEO power, in their view, can be de-legitimating because of its non-compliance with “good governance” principles.
By legitimacy, in corporate governance terms, we mean that there is a perception that […]
RDECOM Board of Directors holds meeting, by U.S. Army RDECOM, under a CC-BY-2.0 licence
Expectations on corporate boards are on the rise, and directors who are experts in the company’s home domain are, understandably, in high demand. Because those experts can more fully grasp all the ins and outs of difficult decisions, organisations with more experts in their boards should in […]
The EU made a move in August to force Apple to pay €13 billion in unpaid taxes. The episode has quickly become emblematic of the EU’s fight against corporate tax avoidance, a dispute which intensified in the aftermath of the 2009 financial crisis. As Europeans see it, this is about the need to provide a level playing field between […]
For capitalism to work, the holders of capital (i.e. shareholders) need to exercise a measure of control and oversight over the companies they own. Without this, directors may simply run corporations in their own interests. For example, Shareholders today often merely rubber stamp recommendations for Director nominations and have a very limited formal role in setting executive pay. Symptoms of […]
Annual US expenditures on business entertainment likely exceed $40 billion. Such “wining and dining” is often viewed with suspicion, as a way for one entity to influence another’s decision makers improperly. Indeed, such concerns often lead governments and other organisations to limit what kinds of meals and other gifts employees can receive (consider, e.g., 5 Code of Federal Regulations […]
Although women have increasingly achieved equality in some domains, there are vast differences in their participation at the highest echelons of the corporate world: boards of directors. In the EU, women hold 17.8 percent of board directorships; in the US, they represent 19.2 percent of S&P 500 board directors. Recently, several countries have taken proactive steps to introduce quotas (hard law) that […]