Matthew J. Bloomfield, Brandon Gipper, John D. Kepler, David Tsui
Executive bonus plans often incorporate performance measures that exclude particular costs—a practice we refer to as “cost shielding.” Based on an agency theoretic framework, we predict that boards use cost shielding to (i) mitigate managerial myopia and (ii) encourage newer executives to disregard sunk costs associated with prior executives’ actions. Consistent with our first prediction, we find evidence that boards use cost shielding to deter myopic underinvestment in intangibles and encourage managers to take advantage of growth opportunities. Consistent with our second prediction, we find that boards tend to shield newly hired executives from costs arising from prior executives’ decisions, and this cost shielding diminishes over the course of executives’ tenure. Collectively, our results provide insight into the purpose of bonus plans and are consistent with the notion that boards deliberately choose performance metrics that alleviate agency conflicts.
{"title":"Cost Shielding in Executive Bonus Plans","authors":"Matthew J. Bloomfield, Brandon Gipper, John D. Kepler, David Tsui","doi":"10.2139/ssrn.3525148","DOIUrl":"https://doi.org/10.2139/ssrn.3525148","url":null,"abstract":"Executive bonus plans often incorporate performance measures that exclude particular costs—a practice we refer to as “cost shielding.” Based on an agency theoretic framework, we predict that boards use cost shielding to (i) mitigate managerial myopia and (ii) encourage newer executives to disregard sunk costs associated with prior executives’ actions. Consistent with our first prediction, we find evidence that boards use cost shielding to deter myopic underinvestment in intangibles and encourage managers to take advantage of growth opportunities. Consistent with our second prediction, we find that boards tend to shield newly hired executives from costs arising from prior executives’ decisions, and this cost shielding diminishes over the course of executives’ tenure. Collectively, our results provide insight into the purpose of bonus plans and are consistent with the notion that boards deliberately choose performance metrics that alleviate agency conflicts.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"95 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121903886","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}
Corporate governance in developing countries is becoming noticeable in the extant literature. In this chapter, we review the development of the corporate governance discourse in Nigeria, paying attention to the challenges of promoting good governance standards through reforms. Relying on institutional theory as against the widely-engaged agency framework, we account for the institutional determinants of corporate governance reforms in Nigeria. We analyse the intricacies of the institutional context in developing countries and their complementarity (or deviance) with the prevailing corporate governance regulatory system.
{"title":"Institutional Perspectives on Corporate Governance Reforms in Nigeria","authors":"Olabisi Daodu, F. Nakpodia, Emmanuel Adegbite","doi":"10.2139/ssrn.3512803","DOIUrl":"https://doi.org/10.2139/ssrn.3512803","url":null,"abstract":"Corporate governance in developing countries is becoming noticeable in the extant literature. In this chapter, we review the development of the corporate governance discourse in Nigeria, paying attention to the challenges of promoting good governance standards through reforms. Relying on institutional theory as against the widely-engaged agency framework, we account for the institutional determinants of corporate governance reforms in Nigeria. We analyse the intricacies of the institutional context in developing countries and their complementarity (or deviance) with the prevailing corporate governance regulatory system.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"157 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121307952","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}
PurposeThe purpose of this paper is to investigate the role of narcissistic supply for the association between CEO narcissism and corporate risk taking.Design/methodology/approachThe authors investigate a sample of 281 non-financial S&P 1500 firms and a corresponding 457 CEOs in the 10-yr period 2006–2015.FindingsThe association between CEO narcissism and corporate risk taking depends on the admiration, attention, and affirmation of own superiority (“narcissistic supply”) that the CEO receives given her/his current position. Thus, a narcissistic CEO with an insufficient narcissistic supply (small firm/small compensation) will crave for more and take more risks (“rock the boat”) while a narcissistic CEO with a sufficient narcissistic supply (large firm/large compensation) will protect the status quo and be reluctant to take new risks. Specifically, the authors find that a change from a slightly narcissistic CEO to a strongly narcissistic CEO, for positions entailing limited (abundant) narcissistic supply, is associated with an increase (a decrease) in corporate risk of 6%–8% (11%–27%).Originality/valuePrevious research indicates a positive association between CEO narcissism and corporate risk taking in specific domains such as M&A and R&D activities. This paper provides a novel contribution to the existing literature by identifying and assessing the important role of narcissistic supply for the association between CEO narcissism and corporate risk taking in general.
{"title":"Do Narcissistic CEOs Rock the Boat?","authors":"T. Aabo","doi":"10.2139/ssrn.3701064","DOIUrl":"https://doi.org/10.2139/ssrn.3701064","url":null,"abstract":"PurposeThe purpose of this paper is to investigate the role of narcissistic supply for the association between CEO narcissism and corporate risk taking.Design/methodology/approachThe authors investigate a sample of 281 non-financial S&P 1500 firms and a corresponding 457 CEOs in the 10-yr period 2006–2015.FindingsThe association between CEO narcissism and corporate risk taking depends on the admiration, attention, and affirmation of own superiority (“narcissistic supply”) that the CEO receives given her/his current position. Thus, a narcissistic CEO with an insufficient narcissistic supply (small firm/small compensation) will crave for more and take more risks (“rock the boat”) while a narcissistic CEO with a sufficient narcissistic supply (large firm/large compensation) will protect the status quo and be reluctant to take new risks. Specifically, the authors find that a change from a slightly narcissistic CEO to a strongly narcissistic CEO, for positions entailing limited (abundant) narcissistic supply, is associated with an increase (a decrease) in corporate risk of 6%–8% (11%–27%).Originality/valuePrevious research indicates a positive association between CEO narcissism and corporate risk taking in specific domains such as M&A and R&D activities. This paper provides a novel contribution to the existing literature by identifying and assessing the important role of narcissistic supply for the association between CEO narcissism and corporate risk taking in general.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"313 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114415353","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}
Abstract Based on the insight that superior access to knowledge can help foreign firms overcome liabilities of foreignness, we examine whether possession of firm-specific advantages shifts foreign firms’ CEO staffing strategies from local managers, who provide host-market insight, toward expatriates, who possess knowledge transfer and coordination capabilities. We find that, as institutional distance increases, firm-specific advantages from multinationality, regional agglomeration, and host-country experience substitute for the host-market insight of local CEOs. Foreign firms with such advantages instead staff the CEO role with expatriates. Our results are practically relevant to MNCs seeking to allocate a limited talent pool across different institutional contexts.
{"title":"Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffing","authors":"Marketa Rickley, S. Karim","doi":"10.2139/ssrn.2520326","DOIUrl":"https://doi.org/10.2139/ssrn.2520326","url":null,"abstract":"Abstract Based on the insight that superior access to knowledge can help foreign firms overcome liabilities of foreignness, we examine whether possession of firm-specific advantages shifts foreign firms’ CEO staffing strategies from local managers, who provide host-market insight, toward expatriates, who possess knowledge transfer and coordination capabilities. We find that, as institutional distance increases, firm-specific advantages from multinationality, regional agglomeration, and host-country experience substitute for the host-market insight of local CEOs. Foreign firms with such advantages instead staff the CEO role with expatriates. Our results are practically relevant to MNCs seeking to allocate a limited talent pool across different institutional contexts.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"71 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122662735","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}
תקציר בעברית: חברות מסחריות פועלות באמצעות החלטות המתקבלות על ידי בני אדם המצויים בעמדות מפתח בחברות. הדמות אשר לה מיוחס הכוח הרב ביותר בחברה ואשר נתפסת כגורם שעל פיו יישק דבר בה הוא בעל השליטה. מי שצובר בידיו החזקה של אחוז גבוה ממניות החברה ("בעל המאה") נתפס גם כ"בעל הדעה". כוח מיתולוגי זה המיוחס לבעל השליטה הביא לחששות מצטברים מפני אפשרויות פגיעתו הרעה בטובת החברה ויתר המשקיעים בה. לפיכך, ברבות השנים הוטלו בדין על בעלי שליטה הן מגבלות פעולה, מעורבות והחלטה בנעשה בחברה והן אחריות משפטית אישית בגין הפרת חובות מצידם או מצד החברות.במאמר זה אנו מעוררים חשש כי היחס בין שיעור החובות והמגבלות המוטלות על בעלי שליטה מחד גיסא לבין היקף הסמכויות והמעורבות שנותרו בידיהם מאידך גיסא אינו מאוזן. לשם כך אנו מחדדים תחילה את משמעותה והגדרתה של "שליטה". כהמשך לכך אנו מציגים מקבץ של מגבלות פעולה ואחריות משפטית שהוטלו ברבות השנים על בעלי שליטה בחברות. המגבלות והאחריות הן פרי חקיקה, אסדרה ופסיקה. אנו טוענים כי המגמה הנמשכת להכביד את עולו של הדין על בעלי שליטה ולקצץ את מרחב פעולתם עלולים להוציא את דיני החברות ואת תפקוד שוק ההון משיווי משקל. הכרסום בסמכויות בעלי השליטה מפחית את הביקוש בשוק לשליטה ואת יעילותה של השליטה כמנגנון בקרה על הנהלת החברה. מעבר לכך, אנו טוענים טענה נורמטיבית. טענתנו היא כי הטלת אחריות נצברת על בעלי שליטה מבלי שנותרת בידיהם מבחינה משפטית סמכות רבה לניווט ענייניה של החברה אינה מוצדקת. כשם שאין לקבל סמכות ללא אחריות, כך אין להצדיק אחריות ללא סמכות.לאור זאת, אנו מציעים שני פתרונות אפשריים אשר עשויים לתרום להשבת האיזון ושיווי המשקל הנדרשים בין סמכויות בעלי השליטה לבין אחריותם. English Abstract: Corporations act through decisions made by human beings who are at the corporate helm. The character to who is considered the most powerful person in the corporation is the controlling shareholder. When a shareholder accumulates a significant percentage of the corporate stock she is considered the decision-maker and the most influential person in the corporation. This mythological power raised concerns that the controlling shareholder might exploit its powers and influence to advance decisions that may harm the corporation and its other investors. As a result, over the years the law has imposed many limitations over the involvement of controlling shareholders’ involvement in the corporate activity and has subjected the controlling shareholders to personal liability for wrongful conduct by them or by the corporations.In this article, we raise the concern that the balance of the scales between curtailing a controlling shareholder’s involvement in the corporation and her personal liability on one hand and the scope of powers and decision-making that remain in her hands on the other hand, has been tipped. In this respect, we first focus on the meaning of the term “control” and its contours. We follow by presenting a list of limitations imposed on the functioning of controlling shareholders’ as well as the personal liability to which the law exposes them. These limitations and personal liability are the cumulative product of legislation, regulation
{"title":"?שליטה\": פסיחה על שתי הסעיפים או שיווי משקל\" Control: Responsibility and Accountability Without Authority","authors":"Asaf Eckstein, Davide Hahn","doi":"10.2139/ssrn.3238052","DOIUrl":"https://doi.org/10.2139/ssrn.3238052","url":null,"abstract":"<b>תקציר בעברית: </b>חברות מסחריות פועלות באמצעות החלטות המתקבלות על ידי בני אדם המצויים בעמדות מפתח בחברות. הדמות אשר לה מיוחס הכוח הרב ביותר בחברה ואשר נתפסת כגורם שעל פיו יישק דבר בה הוא בעל השליטה. מי שצובר בידיו החזקה של אחוז גבוה ממניות החברה (\"בעל המאה\") נתפס גם כ\"בעל הדעה\". כוח מיתולוגי זה המיוחס לבעל השליטה הביא לחששות מצטברים מפני אפשרויות פגיעתו הרעה בטובת החברה ויתר המשקיעים בה. לפיכך, ברבות השנים הוטלו בדין על בעלי שליטה הן מגבלות פעולה, מעורבות והחלטה בנעשה בחברה והן אחריות משפטית אישית בגין הפרת חובות מצידם או מצד החברות.במאמר זה אנו מעוררים חשש כי היחס בין שיעור החובות והמגבלות המוטלות על בעלי שליטה מחד גיסא לבין היקף הסמכויות והמעורבות שנותרו בידיהם מאידך גיסא אינו מאוזן. לשם כך אנו מחדדים תחילה את משמעותה והגדרתה של \"שליטה\". כהמשך לכך אנו מציגים מקבץ של מגבלות פעולה ואחריות משפטית שהוטלו ברבות השנים על בעלי שליטה בחברות. המגבלות והאחריות הן פרי חקיקה, אסדרה ופסיקה. אנו טוענים כי המגמה הנמשכת להכביד את עולו של הדין על בעלי שליטה ולקצץ את מרחב פעולתם עלולים להוציא את דיני החברות ואת תפקוד שוק ההון משיווי משקל. הכרסום בסמכויות בעלי השליטה מפחית את הביקוש בשוק לשליטה ואת יעילותה של השליטה כמנגנון בקרה על הנהלת החברה. מעבר לכך, אנו טוענים טענה נורמטיבית. טענתנו היא כי הטלת אחריות נצברת על בעלי שליטה מבלי שנותרת בידיהם מבחינה משפטית סמכות רבה לניווט ענייניה של החברה אינה מוצדקת. כשם שאין לקבל סמכות ללא אחריות, כך אין להצדיק אחריות ללא סמכות.לאור זאת, אנו מציעים שני פתרונות אפשריים אשר עשויים לתרום להשבת האיזון ושיווי המשקל הנדרשים בין סמכויות בעלי השליטה לבין אחריותם.<br><b>English Abstract: </b>Corporations act through decisions made by human beings who are at the corporate helm. The character to who is considered the most powerful person in the corporation is the controlling shareholder. When a shareholder accumulates a significant percentage of the corporate stock she is considered the decision-maker and the most influential person in the corporation. This mythological power raised concerns that the controlling shareholder might exploit its powers and influence to advance decisions that may harm the corporation and its other investors. As a result, over the years the law has imposed many limitations over the involvement of controlling shareholders’ involvement in the corporate activity and has subjected the controlling shareholders to personal liability for wrongful conduct by them or by the corporations.In this article, we raise the concern that the balance of the scales between curtailing a controlling shareholder’s involvement in the corporation and her personal liability on one hand and the scope of powers and decision-making that remain in her hands on the other hand, has been tipped. In this respect, we first focus on the meaning of the term “control” and its contours. We follow by presenting a list of limitations imposed on the functioning of controlling shareholders’ as well as the personal liability to which the law exposes them. These limitations and personal liability are the cumulative product of legislation, regulation","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115852326","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}
Women and ethnic minority groups hold few boardroom positions. In this paper, we adopt a novel identification strategy to test whether this is caused by a lack of suitable candidates for director positions or, alternatively, by discriminatory barriers that prevent these groups from progressing up the corporate hierarchy. We study the determinants of director appointments following completed mergers and acquisitions. Since directors at the acquisition target will be considered for an appointment at the newly merged firm, our approach allows us to observe the characteristics of successfully appointed target directors jointly with the characteristics of directors who have not been appointed to the board of the merged firm. Our results show empirical evidence consistent with biases in the recruitment of directors. We find that Hispanic directors are less likely to be appointed to the board of the merged firm. Further, women are less likely to be appointed if they previously held a non-executive post and if the representation of women on the acquiring firm’s board is higher. We also find that powerful CEOs are more prone to appoint women to the board. These effects cannot be explained by director and deal characteristics.
{"title":"Jobs for the Boys? The Glass Ceiling and the Market for Corporate Control","authors":"Ruth Mateos de Cabo, Jens Hagendorff, R. Gimeno","doi":"10.2139/ssrn.2458545","DOIUrl":"https://doi.org/10.2139/ssrn.2458545","url":null,"abstract":"Women and ethnic minority groups hold few boardroom positions. In this paper, we adopt a novel identification strategy to test whether this is caused by a lack of suitable candidates for director positions or, alternatively, by discriminatory barriers that prevent these groups from progressing up the corporate hierarchy. We study the determinants of director appointments following completed mergers and acquisitions. Since directors at the acquisition target will be considered for an appointment at the newly merged firm, our approach allows us to observe the characteristics of successfully appointed target directors jointly with the characteristics of directors who have not been appointed to the board of the merged firm. Our results show empirical evidence consistent with biases in the recruitment of directors. We find that Hispanic directors are less likely to be appointed to the board of the merged firm. Further, women are less likely to be appointed if they previously held a non-executive post and if the representation of women on the acquiring firm’s board is higher. We also find that powerful CEOs are more prone to appoint women to the board. These effects cannot be explained by director and deal characteristics.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"282 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124516397","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}
The paper first discusses the board roles as found in the existing literature and identifies the different terms that have been constantly used, to describe similar activities. By examining the roles under agency and resource dependence theories - two of the most dominant theoretical perspectives in corporate governance - the paper attempts to propose a clear set of roles that can be used for future studies. Secondly, the paper argues that most studies research the board’s roles as a whole, while it is important to differentiate between the roles of executives vs. non-executives.
{"title":"What Board Members Do? How the Roles of Executives and Non-Executives Differ","authors":"Ioannis Gkliatis, D. Koufopoulos","doi":"10.2139/ssrn.2746422","DOIUrl":"https://doi.org/10.2139/ssrn.2746422","url":null,"abstract":"The paper first discusses the board roles as found in the existing literature and identifies the different terms that have been constantly used, to describe similar activities. By examining the roles under agency and resource dependence theories - two of the most dominant theoretical perspectives in corporate governance - the paper attempts to propose a clear set of roles that can be used for future studies. Secondly, the paper argues that most studies research the board’s roles as a whole, while it is important to differentiate between the roles of executives vs. non-executives.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130290032","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}
P. Andreou, Constantinos Antoniou, Joanne Horton, C. Louca
We investigate whether four dimensions of corporate governance mechanisms, namely ownership structure, accounting opacity, board structure and process and managerial incentives, relate to 1-year-ahead stock price crash risk. Employing principal component analysis on the 21 attributes that comprise these four categories, we find that corporate governance explains overall between 13.1% and 23.0% of a one standard deviation in future crash risk. Further analysis reveals that transient institutional ownership, CEO stock option incentives and the percentage of directors that hold equity in the firm increase a firm’s future stock price crash, whilst insiders’ ownership, conditional accounting conservatism, board size and the presence of a corporate governance policy have the ability to mitigate crashes. The relations between these governance attributes and future crash risk are more pronounced in environments that accentuate agency risk. Our findings support the notion that sound corporate governance systems curb opportunistic behavior of managers to hide and accumulate bad news from outsiders.
{"title":"Corporate Governance and Firm-Specific Stock Price Crashes","authors":"P. Andreou, Constantinos Antoniou, Joanne Horton, C. Louca","doi":"10.2139/ssrn.2029719","DOIUrl":"https://doi.org/10.2139/ssrn.2029719","url":null,"abstract":"We investigate whether four dimensions of corporate governance mechanisms, namely ownership structure, accounting opacity, board structure and process and managerial incentives, relate to 1-year-ahead stock price crash risk. Employing principal component analysis on the 21 attributes that comprise these four categories, we find that corporate governance explains overall between 13.1% and 23.0% of a one standard deviation in future crash risk. Further analysis reveals that transient institutional ownership, CEO stock option incentives and the percentage of directors that hold equity in the firm increase a firm’s future stock price crash, whilst insiders’ ownership, conditional accounting conservatism, board size and the presence of a corporate governance policy have the ability to mitigate crashes. The relations between these governance attributes and future crash risk are more pronounced in environments that accentuate agency risk. Our findings support the notion that sound corporate governance systems curb opportunistic behavior of managers to hide and accumulate bad news from outsiders.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134374342","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}
The governance reforms carried out in publicly traded companies since, if not before, the fiascos called Enron, WorldCom, Tyco, Global Crossing, et alia have resulted in boards of directors largely staffed with independent, diligent people with solid business experience.Then, why is it that boards, though dutiful and careful, remain surprise-prone and ill-equipped to challenge management. How can we explain the governance issues manifested in so many corporations? Indeed, if management does not provide the board with the relevant information, hides from the board or lies to the board, how can the board be held accountable?Yet, in most, if not all, fiascos, in hindsight, it appeared that warning signs had been overlooked by the board, red flags unseen, symptoms unattended, vagueness not probed.
{"title":"On Becoming an Activist Board! Sketch of a Corporate Governance that Creates Value.","authors":"Yvan Allaire, M. Firsirotu","doi":"10.2139/SSRN.2338549","DOIUrl":"https://doi.org/10.2139/SSRN.2338549","url":null,"abstract":"The governance reforms carried out in publicly traded companies since, if not before, the fiascos called Enron, WorldCom, Tyco, Global Crossing, et alia have resulted in boards of directors largely staffed with independent, diligent people with solid business experience.Then, why is it that boards, though dutiful and careful, remain surprise-prone and ill-equipped to challenge management. How can we explain the governance issues manifested in so many corporations? Indeed, if management does not provide the board with the relevant information, hides from the board or lies to the board, how can the board be held accountable?Yet, in most, if not all, fiascos, in hindsight, it appeared that warning signs had been overlooked by the board, red flags unseen, symptoms unattended, vagueness not probed.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116745355","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}
How do managers react in an environment where bribery is likely to bring high rewards, but also presents high risks? We examine the supply side (firms’ illicit payments) of bribery in a global setting using the United Nations’ (UN) Oil-for-Food Program, part of UN sanctions on Iraq. Some companies helped Iraq circumvent UN sanctions through bribe payments in the form of illicit surcharges. Our transaction-level analysis of factors affecting bribe payments draws on the economic theory of crime, agency theory, and home-country institutions. Results suggest that firms pay larger bribes when there are stronger financial and managerial incentives, but pay less when their home-countries have implemented the OECD Anti-Bribery Convention. We find little relationship between a widely-used country-level corruption perception index and firms’ actual bribery.
{"title":"Who Bribes? Evidence from the United Nations’ Oil-for-Food Program","authors":"Yujin Jeong, R. Weiner","doi":"10.1002/SMJ.1986","DOIUrl":"https://doi.org/10.1002/SMJ.1986","url":null,"abstract":"How do managers react in an environment where bribery is likely to bring high rewards, but also presents high risks? We examine the supply side (firms’ illicit payments) of bribery in a global setting using the United Nations’ (UN) Oil-for-Food Program, part of UN sanctions on Iraq. Some companies helped Iraq circumvent UN sanctions through bribe payments in the form of illicit surcharges. Our transaction-level analysis of factors affecting bribe payments draws on the economic theory of crime, agency theory, and home-country institutions. Results suggest that firms pay larger bribes when there are stronger financial and managerial incentives, but pay less when their home-countries have implemented the OECD Anti-Bribery Convention. We find little relationship between a widely-used country-level corruption perception index and firms’ actual bribery.","PeriodicalId":444911,"journal":{"name":"CGN: General Management (Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131138686","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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