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.
Using data on the universe of US-based mutual funds, we find that two out of five fund families hold corporate bonds of firms in which they also own an equity stake. We show that the greater the fraction of debt a fund family holds in a given...Read more
This article offers a theory of mutual fund voting to answer when mutual funds should vote on behalf of their investors and when they should not. It argues that voting authority for mutual funds ought to depend upon: (1) whether the fund...Read more
Investment mandates determine how more than $7tn of fixed income assets are managed by mutual funds in the US. Using textual analysis, we measure the use of credit ratings in fixed income mutual fund investment mandates. The use of ratings to...Read more
We provide an extensive analysis of the payout policy of U.S. banks during the crisis to examine potential risk-shifting and signaling motives of banks. We estimate an empirical model of bank payouts to assess the extent to which changes in...Read more