Amongst the regular challenges of modern governance are the corporate scandals. These have affected almost every business sector, most recently of course the so-called disruptive Big Tech companies. It seems none of these social media technology companies are exempt from scandal. Google have been accused of abusing the dominance of its Android smart phone operating system and Apple were […]
This is the story of two cups of coffee, or at least that is where the story begins. The first, between me, Sandy Pepper, a Professor of Practice in the Department of Management at LSE, and Dr Susanne Burri of the Department of Philosophy, Logic & Scientific Discovery, took place in March 2016 in the Lundenwic coffee shop on […]
One distinct feature of the rise in income inequality over recent decades is the surging incomes of the working rich, particularly the pay of a class of top managers. A popular view stresses the role of performance-related pay in generating this feature. According to this view, the pay of many top managers is high-powered (i.e., with incentives tied to firm […]
According to the U.S. Financial Crisis Inquiry Commission, the main causes of the financial crisis of 2007-2009 were failures of corporate governance and policy, including widespread failures in financial regulation and supervision, lack of transparency, poor preparation by the government, and systemic breakdown in accountability. The Commission concluded that the crisis was avoidable.
In their book This Time is Different: Eight Centuries of […]
Family firms are the most prevalent type of firm in the world. This is especially true in emerging economies, where they account for over half of medium-sized firms in the manufacturing sector. In particular, dynastic family firms – that is, where the founding family owns a controlling share and have appointed a second-generation (or later) family member as the […]
The UK is about to stop shareholders monopolising votes for company boards, with worker voice. Currently, asset managers control most shareholder votes in public companies. They have systemic conflicts of interest, because shareholder votes can influence companies to buy asset managers’ financial products (e.g. defined contribution pensions). But now this is changing. One small step, following government consultation, is that the Financial […]
The widely reported resignation of Uber board member, David Bonderman, following his words at an all-hands staff meeting in June 2017 offers an exemplary case of controversy in corporate ethics and culture.
I revisit the event to analyse how these remarks were treated as ethically accountable conduct, and how such conduct takes place and is seen to happen within workplace […]
In December 2016, Rupert Murdoch’s 21st Century Fox reached an agreement in principle to buy satellite broadcaster Sky. After Fox formally notified the European Commission of its bid on 3 March, Culture, Media and Sport Secretary Karen Bradley has said that she is ‘minded to’ refer the deal to Ofcom on the grounds of media plurality and commitment to broadcasting standards.
Karen Bradley will […]
The board of directors forms an integral part of a firm’s governance mechanisms. Yet, how boards perform their dual role of supervisor and advisor of corporate management is difficult to observe from outside of the company. To open this black box, we survey 130 non-executive directors in various emerging markets to obtain detailed information about the inner workings of […]
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 […]