GCGC

Video

Presentation

This paper examines how audit oversight by a public-sector regulator affects investors’ assessments of reporting credibility. We analyze whether the introduction of the Public Company Accounting Oversight Board (PCAOB) and its inspection regime have strengthened capital- market responses to unexpected earnings releases, as theory predicts when reporting credibility increases.

October 26 2021

The current trend in bankruptcy legislation is to follow the US model of Chapter 11, whereby the courts have the authority to ‘stay’ the liquidation rights of the secured creditors. The alternative approach of freedom of contracting, whereby the courts limit themselves to strictly enforcing the rights of all parties, is largely ignored, for fear that such a system would be plagued by coordination failures among creditors. We study the resolution of financial distress in shipping, where the ex territorial nature of assets have distanced the industry from on shore bankruptcy legislation.

October 26 2021

We present a model where firms compete for scarce managerial talent (“alpha”) and managers are risk-averse. When managers cannot move across firms after being hired, employers learn about their talent, allocate them efficiently to projects and provide insurance to low-quality managers. When instead managers can move across firms, firm-level coinsurance is no longer feasible, but managers may self-insure by switching employer to delay the revelation of their true quality. However this results in inefficient project assignment, with low quality managers handling too risky projects.

October 26 2021

A board gender quota reduces firm value if it forces the appointment of under-qualified female directors. We test this hypothesis using Norway’s 2005 board gender-quota law, which increased the average fraction of female directors from 5% in 2001 to 40% by 2008. Statistically robust analyses of quota- induced shareholder announcement returns, and of long-run stock and accounting performance, fail to reject the hypothesis of a zero valuation effect of this economy-wide shock to board composition and director independence.

October 26 2021

Most listed firms are freestanding in the U.S, while listed firms in other countries often belong to business groups: lasting structures in which listed firms control other listed firms.

October 26 2021

This panel discussion focused on corporate governance indices. This topic, being something that finance professors, economists and law professors feel very passionate about, is also something important to practitioners outside of academia.

October 26 2021

This paper clarifies why corporate governance arrangements in public firms generally do not make use of judicial evaluations of boards’ and managers’ business decisions. In principle, information generated in litigation, particularly discovery, could usefully supplement public information (particulary stock prices) in the provision of performance incentives. In particular, the optimally adjusted combination of standard performance pay and litigation could impose less risk on boards and managers than standard performance pay alone.

October 26 2021

Hedge fund activism has recently spiked, almost hyperbolically. No one disputes this, but divergent explanations exist for it. Some see activist hedge funds as the natural champions of dispersed shareholders, who are not economically capable of collective action in their own interest. So viewed, hedge fund activism can bridge the separation of ownership and control. That, however, may assume what is to be proved. Others believe that hedge funds have interests that differ materially from those of other shareholders.

October 26 2021

‘Disruptive’ innovations are powerful forces for reshaping activities and generating growth. Yet by definition, the properties (what they can do) and consequences (whether they disrupt) of innovations are not widely understood when they are first explored. This aggravates agency problems in financing innovative projects, increasing the cost of capital. Policymakers, keen to stimulate innovation, are exploring a number of ways of facilitating capital-raising by innovative firms.

October 26 2021

Pages