ESG Rating Disagreement and Stock Returns

A variety of professional data vendors nowadays provide firm-level Environmental, Social, and Governance (ESG) ratings (or scores). These ratings...Read more

Rajna Gibson Brandon
Philipp Krueger
Nadine Riand
Peter Steffen Schmidt
02 March 2020


We study the effect of staggered boards on long-run firm value using a natural experiment: a 1990 law that imposed a staggered board on all firms incorporated in Massachusetts. We find a significant and positive average (and median) increase in Tobins Q for innovating firms, particularly those facing greater Wall Street scrutiny. This increase in value appears to come, at least in part, from increased investment in R&D and capital expenditures and from valuable patents.

October 27 2021