This paper explains how hedge-fund activists are exerting power over corporate resource allocation far in excess of the actual voting power of their shareholdings. The power of these `minority-shareholding corporate raiders` derives from misguided regulatory `reforms` carried out in the 1980s and 1990s in the name of `shareholder democracy`. Sanctioned and overseen by the Department of Labor (DOL) and the Securities and Exchange Commission (SEC), these reforms include the introduction of compulsory voting by institutional investors and proxy-voting rule changes that greatly facilitated hedge-fund activists` aggregation of the proxy votes of institutional investors. In addition, the introduction of the 1996 National Securities Markets Improvement Act (NSMIA) that allowed hedge funds to draw funds from institutional investors effectively with no limit also played an important role in the rise of hedge-fund activism. The paper concludes with policy proposals to rebalance value creation and value extraction by rebuilding the engagement and proxy voting system including (1) making it mandatory for shareholders to submit justifications in shareholder proposals on value creation or capital formation of corporations concerned; (2) removing voting as a fiduciary duty of institutional investors; (3) introducing differentiated voting rights that favor long-term shareholders; and (4) making it mandatory for both shareholders and management to reveal to the public what they discussed in engagement sessions.
{"title":"The Subversion of Shareholder Democracy and the Rise of Hedge-Fund Activism","authors":"Jang-Sup Shin","doi":"10.2139/ssrn.3226103","DOIUrl":"https://doi.org/10.2139/ssrn.3226103","url":null,"abstract":"This paper explains how hedge-fund activists are exerting power over corporate resource allocation far in excess of the actual voting power of their shareholdings. The power of these `minority-shareholding corporate raiders` derives from misguided regulatory `reforms` carried out in the 1980s and 1990s in the name of `shareholder democracy`. Sanctioned and overseen by the Department of Labor (DOL) and the Securities and Exchange Commission (SEC), these reforms include the introduction of compulsory voting by institutional investors and proxy-voting rule changes that greatly facilitated hedge-fund activists` aggregation of the proxy votes of institutional investors. In addition, the introduction of the 1996 National Securities Markets Improvement Act (NSMIA) that allowed hedge funds to draw funds from institutional investors effectively with no limit also played an important role in the rise of hedge-fund activism. The paper concludes with policy proposals to rebalance value creation and value extraction by rebuilding the engagement and proxy voting system including (1) making it mandatory for shareholders to submit justifications in shareholder proposals on value creation or capital formation of corporations concerned; (2) removing voting as a fiduciary duty of institutional investors; (3) introducing differentiated voting rights that favor long-term shareholders; and (4) making it mandatory for both shareholders and management to reveal to the public what they discussed in engagement sessions.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128921081","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
To eradicate extreme poverty requires participation of people. Identifying poor population and making them employable is essential to eradicate poverty. Economic growth is important to eradicate poverty; equitable wealth distribution is sine-qua-non to sustainable development. This chapter narrates briefly success stories of the exemplary co-operatives working to reduce poverty by collective action for millions of people and through working on multiple targets set by SDGs. As per Oxfam Report published at the time of 2017 World Economic Forum in Davos, the world’s eight richest billionaires control the same wealth equals to the poorest half of the globe’s population. The extreme unequal wealth distribution is alarming. It is well accepted that sustainable development involves a combination of economic development, environmental sustainability and social inclusion. This paper discusses how a cooperative organisaton can be used as tool to address the issue of SDG, Poverty Reduction and Policy Coherence.
{"title":"Ending Poverty and SDG Policy Coherence in Areas with Important Cross-Border Dimensions: Experiment on Cooperatives","authors":"V. Sapovadia, Dr. Sweta V. Patel","doi":"10.2139/ssrn.3208789","DOIUrl":"https://doi.org/10.2139/ssrn.3208789","url":null,"abstract":"To eradicate extreme poverty requires participation of people. Identifying poor population and making them employable is essential to eradicate poverty. Economic growth is important to eradicate poverty; equitable wealth distribution is sine-qua-non to sustainable development. This chapter narrates briefly success stories of the exemplary co-operatives working to reduce poverty by collective action for millions of people and through working on multiple targets set by SDGs. As per Oxfam Report published at the time of 2017 World Economic Forum in Davos, the world’s eight richest billionaires control the same wealth equals to the poorest half of the globe’s population. The extreme unequal wealth distribution is alarming. It is well accepted that sustainable development involves a combination of economic development, environmental sustainability and social inclusion. This paper discusses how a cooperative organisaton can be used as tool to address the issue of SDG, Poverty Reduction and Policy Coherence.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130065793","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies an informational role of a decision to appoint a black director (BD) to a white board in a regime shaped by the Sarbanes-Oxley Act. I find that the decision slashes firm valuation, perhaps because it reveals the true color of existing white directors (WDs) are gray. A director is white if she passes independence criteria of both SEC and a proxy advisor and black if she passes only SEC's. Knowing the proxy advisor detects BDs and investors disfavor them, a manager appoints a BD only when he expects greater private benefits than a valuation loss and runs out of gray directors (GDs). Consistent with the mechanism, I find that a manager makes a board gray when he is short of GDs, and firm value plunges only when he turns a board gray; it varies little when he makes a board grayer or less gray. Moreover, investors find a WD of a gray board less valuable than of a white board when she suddenly passes away, suggesting the association is causal.
{"title":"Black Directors: Sarbanes-Oxley and Hidden Board Independence","authors":"Sunwoo Hwang","doi":"10.2139/ssrn.3102747","DOIUrl":"https://doi.org/10.2139/ssrn.3102747","url":null,"abstract":"This paper studies an informational role of a decision to appoint a black director (BD) to a white board in a regime shaped by the Sarbanes-Oxley Act. I find that the decision slashes firm valuation, perhaps because it reveals the true color of existing white directors (WDs) are gray. A director is white if she passes independence criteria of both SEC and a proxy advisor and black if she passes only SEC's. Knowing the proxy advisor detects BDs and investors disfavor them, a manager appoints a BD only when he expects greater private benefits than a valuation loss and runs out of gray directors (GDs). Consistent with the mechanism, I find that a manager makes a board gray when he is short of GDs, and firm value plunges only when he turns a board gray; it varies little when he makes a board grayer or less gray. Moreover, investors find a WD of a gray board less valuable than of a white board when she suddenly passes away, suggesting the association is causal.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127644003","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Johannes Beyenbach, M. S. Rapp, C. Strenger, Michael Wolff
English Abstract: The Code Compliance Study 2018 examines the acceptance level of the current version of the German Corporate Governance Code (GCGC) within DAX and MDAX firms. The study analyses overall compliance, as well as the firms’ compliance behavior on the level of chapters, items and even single GCGC recommendations. In addition, the study examines the firms' governance quality based on four specially constructed governance indices that represent the the key areas of governance (transparency, monitoring/control, incentives and diversity). Moreover, compliance behavior with respect to GCGC's suggestions as well as the relationship between firm characteristics and compliance levels is analyzed. Overall, the study presents a broad and comprehensive view on code compliance behavior of German listed firms. German Abstract: Die Studie analysiert und bewertet systematisch und umfassend die Akzeptanz der aktuellen, vierzehnten Fassung des Deutschen Corporate Governance Kodex (DCGK) durch DAX-und MDAX-Gesellschaften anhand der durch §161 AktG vorgeschriebenen Entsprechenserklärungen. Analysiert wird das grundsätzliche Niveau der Kodexakzeptanz, aber auch das Entsprechensverhalten der Gesellschaften auf Kapitel- und Ziffernebene, bis hin zur Analyse einzelner Empfehlungen. Darüber hinaus untersucht die Studie die Governance Qualität der Gesellschaften basierend auf vier eigens hierfür konstruierten Governance Indizes, welche die Kernbereiche Transparenz, Kontrolle/Überwachung, Anreizsysteme und Vielfalt abbilden. Ergänzt wird dies um Analysen hinsichtlich des Verhaltens bezüglich Kodexanregungen, des Zusammenhangs zwischen Complianceverhalten und Unternehmensgröße bzw. Eigentümerstruktur und einer Analyse der im Rahmen der Entsprechenserklärungen gegebenen Erläuterungen. Im Rahmen der Studie werden die bis 31. März 2018 veröffentlichten Entsprechenserklärungen (gemäß §161 AktG) der in DAX und MDAX notierten Gesellschaften analysiert. Die untersuchten Unternehmen repräsentieren zu Ende 2017 etwa 86 Prozent der Marktkapitalisierung des Prime Standard der Deutschen Börse, sodass die Studie einen umfassenden und gleichzeitig individuell- differenzierten Blick auf die marktrelevante Akzeptanz des DCGK in den größten deutschen Aktiengesellschaften vermittelt.
摘要:2018年准则合规研究调查了DAX和MDAX公司对当前版本的德国公司治理准则(GCGC)的接受程度。该研究分析了总体合规情况，以及各公司在章节、项目甚至单个GCGC建议层面的合规行为。此外，该研究基于四个特别构建的治理指数来检验公司的治理质量，这些指数代表了治理的关键领域(透明度、监督/控制、激励和多样性)。此外，本文还分析了企业对ggc建议的合规行为，以及企业特征与合规水平之间的关系。总体而言，本研究对德国上市公司的合规行为提供了一个广泛而全面的视角。摘要:Die stude analyert und bewertet systematisch and unfassend Die Akzeptanz der aktuellen, vierzehnten Fassung des Deutschen公司治理Kodex (DCGK) durch dax and MDAX-Gesellschaften andhand der durch§161 AktG vorgeschriebenen Entsprechenserklärungen。分析与分析:分析与分析:分析与分析:分析与分析:分析与分析:分析与分析:分析与分析:分析与分析:分析与分析:研究与分析:中国治理研究中心(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司(深圳)有限公司Ergänzt wind dies um Analysen hinsichtlich des Verhaltens bezglich Kodexanregungen, des zusammenhayszwischen Complianceverhalten and Unternehmensgröße bzw。特征分析结构与结构分析研究进展Entsprechenserklärungen gegebenen Erläuterungen。我叫拉赫曼·德·斯考迪，今年31岁。März 2018 veröffentlichten Entsprechenserklärungen (gemäߧ161 AktG) der in DAX and MDAX notierten Gesellschaften analyert。Die untersuchten undernehmen repräsentieren zu Ende 2017 etwa 86 Prozent der Marktkapitalisierung des Prime Standard der Deutschen Börse, sodass Die studeinen umfassenden and gleichzetitititien schaften vermittelt.德国，德国，Aktiengesellschaften vermittelt。
{"title":"Code Compliance Study 2018 - Analysis of the Declarations of Conformity with the German Corporate Governance Code (Version February 2017)","authors":"Johannes Beyenbach, M. S. Rapp, C. Strenger, Michael Wolff","doi":"10.2139/ssrn.3219697","DOIUrl":"https://doi.org/10.2139/ssrn.3219697","url":null,"abstract":"<b>English Abstract:</b> The Code Compliance Study 2018 examines the acceptance level of the current version of the German Corporate Governance Code (GCGC) within DAX and MDAX firms. The study analyses overall compliance, as well as the firms’ compliance behavior on the level of chapters, items and even single GCGC recommendations. In addition, the study examines the firms' governance quality based on four specially constructed governance indices that represent the the key areas of governance (transparency, monitoring/control, incentives and diversity). Moreover, compliance behavior with respect to GCGC's suggestions as well as the relationship between firm characteristics and compliance levels is analyzed. Overall, the study presents a broad and comprehensive view on code compliance behavior of German listed firms. <b>German Abstract:</b> Die Studie analysiert und bewertet systematisch und umfassend die Akzeptanz der aktuellen, vierzehnten Fassung des Deutschen Corporate Governance Kodex (DCGK) durch DAX-und MDAX-Gesellschaften anhand der durch §161 AktG vorgeschriebenen Entsprechenserklärungen. Analysiert wird das grundsätzliche Niveau der Kodexakzeptanz, aber auch das Entsprechensverhalten der Gesellschaften auf Kapitel- und Ziffernebene, bis hin zur Analyse einzelner Empfehlungen. Darüber hinaus untersucht die Studie die Governance Qualität der Gesellschaften basierend auf vier eigens hierfür konstruierten Governance Indizes, welche die Kernbereiche Transparenz, Kontrolle/Überwachung, Anreizsysteme und Vielfalt abbilden. Ergänzt wird dies um Analysen hinsichtlich des Verhaltens bezüglich Kodexanregungen, des Zusammenhangs zwischen Complianceverhalten und Unternehmensgröße bzw. Eigentümerstruktur und einer Analyse der im Rahmen der Entsprechenserklärungen gegebenen Erläuterungen. Im Rahmen der Studie werden die bis 31. März 2018 veröffentlichten Entsprechenserklärungen (gemäß §161 AktG) der in DAX und MDAX notierten Gesellschaften analysiert. Die untersuchten Unternehmen repräsentieren zu Ende 2017 etwa 86 Prozent der Marktkapitalisierung des Prime Standard der Deutschen Börse, sodass die Studie einen umfassenden und gleichzeitig individuell- differenzierten Blick auf die marktrelevante Akzeptanz des DCGK in den größten deutschen Aktiengesellschaften vermittelt.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124632128","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this research an attempt will be made to concentrate on women destructive entrepreneurship in business units. The background of this discussion is the fact that destructive entrepreneurship is the approach of social question and economic problem. Business ethics deals with the activities of enterprises since the standards according to which business operates determine the economic welfare of society. Taking into account the fact that in general entrepreneurship is perceived as a push factor that leads to the growth and development of the economy, the examination of entrepreneurship that impacts negatively country’s welfare appears to be a very significant problem.
{"title":"Women Destructive Entrepreneurship","authors":"Małgorzata Bielenia","doi":"10.2139/ssrn.3191798","DOIUrl":"https://doi.org/10.2139/ssrn.3191798","url":null,"abstract":"In this research an attempt will be made to concentrate on women destructive entrepreneurship in business units. The background of this discussion is the fact that destructive entrepreneurship is the approach of social question and economic problem. Business ethics deals with the activities of enterprises since the standards according to which business operates determine the economic welfare of society. Taking into account the fact that in general entrepreneurship is perceived as a push factor that leads to the growth and development of the economy, the examination of entrepreneurship that impacts negatively country’s welfare appears to be a very significant problem.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"110 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127106675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-05-31DOI: 10.19070/2643-038x-180003
Spyros Papathanasiou, P. Mylonas, Dimitris Kenourgios
The aim of this study is to examine the correlation of the service quality dimensions to the overall customer satisfaction in the Greek banking sector, following its restructuring due to the mergers and the takeovers during the current financial crisis period (2009 - 2015), and to analyze in particular the case of Piraeus Bank, the biggest Greek commercial Bank. The research conducted so as the data to be collected, was drawn from a customer sample of the Piraeus Bank and as for the measurements used, are based on the widely accepted SERVQUAL model, as it is proposed by Parasuraman et al., (1988). where the five dimensions of service quality merged: reliability, responsiveness, empathy, assurance and tangibles. According to the results, all service quality dimensions are positively related to the customer satisfaction. The greatest impact, regarding customer satisfaction, was observed most in the dimensions of empathy and reliability. Moreover, it was discovered that a certain type of customer discontent is on the verge of being manifested among the considered bank services.
{"title":"Bank Mergers - Takeovers and Customer Satisfaction: The Case of a Greek Commercial Bank","authors":"Spyros Papathanasiou, P. Mylonas, Dimitris Kenourgios","doi":"10.19070/2643-038x-180003","DOIUrl":"https://doi.org/10.19070/2643-038x-180003","url":null,"abstract":"The aim of this study is to examine the correlation of the service quality dimensions to the overall customer satisfaction in the Greek banking sector, following its restructuring due to the mergers and the takeovers during the current financial crisis period (2009 - 2015), and to analyze in particular the case of Piraeus Bank, the biggest Greek commercial Bank. The research conducted so as the data to be collected, was drawn from a customer sample of the Piraeus Bank and as for the measurements used, are based on the widely accepted SERVQUAL model, as it is proposed by Parasuraman et al., (1988). where the five dimensions of service quality merged: reliability, responsiveness, empathy, assurance and tangibles. According to the results, all service quality dimensions are positively related to the customer satisfaction. The greatest impact, regarding customer satisfaction, was observed most in the dimensions of empathy and reliability. Moreover, it was discovered that a certain type of customer discontent is on the verge of being manifested among the considered bank services.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125684246","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research Summary Protecting minority shareholders is a central issue in corporate governance. A common tool of empowering minority shareholders is to curb controlling shareholders’ power of expropriating firm value, but this approach was rarely successful because of the resistance from powerful controlling shareholders. We examine an alternative way of empowering minority shareholders without directly fighting with controlling shareholders. A major corporate governance reform in China gave minority shareholders a decision right over certain actions that affected the creation of firm value. We demonstrate that the greater the extent to which minority shareholders’ actions can influence the firm's value ex post, the more value controlling shareholders concede to minority shareholders ex ante. This effect becomes even stronger when controlling shareholders are able to expropriate a larger portion of firm value. Managerial Summary Minority shareholders often have to contend with excessive extraction of firm value by powerful controlling shareholders, particularly in emerging markets. When this tension is considered as a zero‐sum game in which every gain to controlling shareholders has to come from a loss to minority shareholders, controlling shareholders strongly resist any effort to empower minority shareholders. We propose an alternative approach to empower minority shareholders. A major reform of Chinese listed firms bestowed on minority shareholders decision rights to take certain actions that could ex post create a larger “pie” (firm value) for all shareholders. We find that controlling shareholders give away greater value ex ante to minority shareholders to induce more of these actions. Consequentially, minority shareholders are more effectively empowered when they can affect firm value.
{"title":"Value Creation and Value Capture in Governing Shareholder Relationships: Evidence from a Policy Experiment in an Emerging Market","authors":"Nan Jia, Jing Shi, Yongxiang Wang","doi":"10.2139/ssrn.2171355","DOIUrl":"https://doi.org/10.2139/ssrn.2171355","url":null,"abstract":"Research Summary Protecting minority shareholders is a central issue in corporate governance. A common tool of empowering minority shareholders is to curb controlling shareholders’ power of expropriating firm value, but this approach was rarely successful because of the resistance from powerful controlling shareholders. We examine an alternative way of empowering minority shareholders without directly fighting with controlling shareholders. A major corporate governance reform in China gave minority shareholders a decision right over certain actions that affected the creation of firm value. We demonstrate that the greater the extent to which minority shareholders’ actions can influence the firm's value ex post, the more value controlling shareholders concede to minority shareholders ex ante. This effect becomes even stronger when controlling shareholders are able to expropriate a larger portion of firm value. Managerial Summary Minority shareholders often have to contend with excessive extraction of firm value by powerful controlling shareholders, particularly in emerging markets. When this tension is considered as a zero‐sum game in which every gain to controlling shareholders has to come from a loss to minority shareholders, controlling shareholders strongly resist any effort to empower minority shareholders. We propose an alternative approach to empower minority shareholders. A major reform of Chinese listed firms bestowed on minority shareholders decision rights to take certain actions that could ex post create a larger “pie” (firm value) for all shareholders. We find that controlling shareholders give away greater value ex ante to minority shareholders to induce more of these actions. Consequentially, minority shareholders are more effectively empowered when they can affect firm value.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126508144","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study relational contracting and renegotiation in environments with external enforcement of long-term contractual arrangements. A long-term contract governs the stage games that the contracting parties will play in the future (depending on verifiable stage-game outcomes) until they renegotiate. In a contractual equilibrium, the parties choose their individual actions rationally, jointly optimize when selecting a contract, and exercise their relative bargaining power. Our main result is that in a wide variety of settings, the optimal contract is semi-stationary, with stationary terms for all future periods but special terms for the current period. In each period the parties renegotiate to this same contract. For example, in a simple principal-agent model with a choice of costly monitoring technology, the optimal contract specifies mild monitoring for the current period but intense monitoring for future periods. Because the parties renegotiate in each new period, intense monitoring arises only off the equilibrium path after a failed renegotiation. (JEL C73, C78, D23, D86)
{"title":"Relational Contracting, Negotiation, and External Enforcement","authors":"David A. Miller, Trond E. Olsen, Joel Watson","doi":"10.2139/ssrn.3180551","DOIUrl":"https://doi.org/10.2139/ssrn.3180551","url":null,"abstract":"We study relational contracting and renegotiation in environments with external enforcement of long-term contractual arrangements. A long-term contract governs the stage games that the contracting parties will play in the future (depending on verifiable stage-game outcomes) until they renegotiate. In a contractual equilibrium, the parties choose their individual actions rationally, jointly optimize when selecting a contract, and exercise their relative bargaining power. Our main result is that in a wide variety of settings, the optimal contract is semi-stationary, with stationary terms for all future periods but special terms for the current period. In each period the parties renegotiate to this same contract. For example, in a simple principal-agent model with a choice of costly monitoring technology, the optimal contract specifies mild monitoring for the current period but intense monitoring for future periods. Because the parties renegotiate in each new period, intense monitoring arises only off the equilibrium path after a failed renegotiation. (JEL C73, C78, D23, D86)","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121276433","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Social entrepreneurship has always been acontested concept, both within the academic discourse and in practce. A lot of scholarly effort has been put into analyzing the different defnitons of social entrepreneurship and the negatve consequences that the defnitonal debate has on the opportunity to advance social entrepreneurship as a research feld. Very litle is known about what the consequences of the multple meanings of social entrepreneurship are for people working in the sector. This paper advances knowledge on this topic by looking at the social entrepreneurship sector in England and by investgatng through qualitatve research methods what sector members think about social entrepreneurship and its unclear boundaries. The results show that there are three different conceptons of social entrepreneurship within the sector in England. However, while everyone agrees on the presence of a defnitonal debate, opinions on what this means for the sector are several. Some members think it is something positve; some others think it is causing different issues, and a third group considers it as irrelevant.
{"title":"Unpacking Social Entrepreneurship: Exploring the Definition Chaos and its Consequences in England","authors":"T. Collavo","doi":"10.7341/20181423","DOIUrl":"https://doi.org/10.7341/20181423","url":null,"abstract":"Social entrepreneurship has always been acontested concept, both within the academic discourse and in practce. A lot of scholarly effort has been put into analyzing the different defnitons of social entrepreneurship and the negatve consequences that the defnitonal debate has on the opportunity to advance social entrepreneurship as a research feld. Very litle is known about what the consequences of the multple meanings of social entrepreneurship are for people working in the sector. This paper advances knowledge on this topic by looking at the social entrepreneurship sector in England and by investgatng through qualitatve research methods what sector members think about social entrepreneurship and its unclear boundaries. The results show that there are three different conceptons of social entrepreneurship within the sector in England. However, while everyone agrees on the presence of a defnitonal debate, opinions on what this means for the sector are several. Some members think it is something positve; some others think it is causing different issues, and a third group considers it as irrelevant.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"87 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114735411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a typical public company, shareholders can elect the board, appoint auditors, and approve fundamental changes. Firms with dual class share (DCS) structures alter this balance by inviting the subordinate shareholders to carry the financial risk of investing in the corporation without providing them with the corresponding power to elect the board or exercise other fundamental voting rights. This article fills a conspicuous gap in the scholarly literature by providing empirical data regarding the governance of DCS firms beyond the presence of sunrise and sunset provisions. The summary data suggest that the governance of DCS firms is variable. A large proportion of DCS firms have no majority of the minority voting provisions and no independent chair. By contrast, almost half of the DCS firms have a sunset clause and a majority of independent directors. Finally, just under one-third of DCS firms have change of control provisions over and above existing law. On the basis of this evidence, this article argues against complete private ordering in favor of limited reforms to protect shareholders in DCS firms including: mandatory sunset provisions, disclosure relating to shareholder votes, and buyout protections that would address weaknesses inherent in DCS firms.
{"title":"Governance Issues in Dual Class Share Firms","authors":"Anita Anand","doi":"10.2139/SSRN.3178345","DOIUrl":"https://doi.org/10.2139/SSRN.3178345","url":null,"abstract":"In a typical public company, shareholders can elect the board, appoint auditors, and approve fundamental changes. Firms with dual class share (DCS) structures alter this balance by inviting the subordinate shareholders to carry the financial risk of investing in the corporation without providing them with the corresponding power to elect the board or exercise other fundamental voting rights. This article fills a conspicuous gap in the scholarly literature by providing empirical data regarding the governance of DCS firms beyond the presence of sunrise and sunset provisions. The summary data suggest that the governance of DCS firms is variable. A large proportion of DCS firms have no majority of the minority voting provisions and no independent chair. By contrast, almost half of the DCS firms have a sunset clause and a majority of independent directors. Finally, just under one-third of DCS firms have change of control provisions over and above existing law. On the basis of this evidence, this article argues against complete private ordering in favor of limited reforms to protect shareholders in DCS firms including: mandatory sunset provisions, disclosure relating to shareholder votes, and buyout protections that would address weaknesses inherent in DCS firms.","PeriodicalId":416291,"journal":{"name":"IO: Firm Structure","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125411555","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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