Most listed firms have concentrated ownership structures. However this ownership type is problematic. A clinical analysis reveals that the corporate governance in these firms in terms of liability, voice and exit faces important design problems.
Our analysis shows that the corporate governance of these firms is mainly aimed at checking the shareholders-manager agency problem leaving the controlling shareholder-minority agency problem unresolved. Therefore it is crucial to provide growing companies with commitment tools that allow them to access capital markets and to raise funds from outside investors in better terms without having to give up the benefits of control. This leads us to a proposal that could improve the protection of outside investors while maintaining the informational benefits of concentrated ownership structures: a ?Say-on-Dividend? policy. This proposal is centered in empowering independent directors and activist and institutional investors in the design of dividend policy as informed intermediaries that can represent the voice of the outside investors in the control of the funds that they invest in the firm.
We test the hypothesis that a specific aspect of culture – trust in others – affects shareholder voting behavior as it lowers investors’ concerns of being expropriated. We find consistent evidence that the percentage of votes cast at shareholder...Read more
We discuss the challenges in quantifying common ownership and derive a measure that captures the extent to which overlapping ownership structures shift managers’ incentives to internalize externalities. A key feature of the measure is that it...Read more
This paper estimates a spatial model of proxy voting, the W-NOMINATE method for scaling legislatures, and maps institutional investors onto a left-right dimension based on their votes for fiscal year 2012. The far-left are socially responsible...Read more
We analyze how risk sharing between a firm’s employees and owners depends on its competitors’ response to industry-wide shocks. Focusing on the electricity industry, we obtain a sample of firms with exposure to similar industry risks but...Read more