Corporate Governance Research Program in the News
Press Releases (scroll down for Media Coverage)
|
New Research Shows Significant Influence of Proxy Advisory Firms on CEO Compensation More than two-thirds of U.S. companies say that their executive compensation program is influenced by the policies and voting recommendations of proxy voting advisors like Institutional Shareholder Services (ISS) and Glass Lewis, according to new research from The Conference Board, The NASDAQ OMX Group, Inc., and Stanford University's Rock Center for Corporate Governance. In particular, a majority of corporate boards are likely to change CEO compensation to gain a favorable "say-on-pay" recommendation from these firms. PR Newswire Source: The Conference Board (March 2012) 2011 Corporate Board of Directors Survey A new survey from Stanford University’s Rock Center for Corporate Governance and Heidrick & Struggles has uncovered surprises about who makes the best board directors: it’s not necessarily the current CEOs that most companies seek out. (August 2011) Why Does Corporate Governance Really Matter? A New book by David Larcker and Brian Tayan showcases research into how boards can govern better. (May 2011) |
Stanford’s “Closer Look” Series Examines Hot Topics in Corporate Governance Case Studies Explore Governance Challenges at Top Companies and Myths Surrounding Board Practices (July 2011) 7 Myths of Executive Compensation Corporate governance experts from Stanford Graduate School of Business say criticism of CEO pay might be off the mark. (June 2011) Is That CEO Telling the Truth? How do you tell if CEOs are not being truthful during quarterly earnings conference calls? Stanford Graduate School of Business researchers have developed a model to analyze the words and phrases used during these calls and found some specific speech patterns that give clues. (August 2010) CEO Succession Planning Lags Badly, Research Finds The survey of more than 140 CEOs and board directors of North American public and private companies reveals critical lapses in CEO succession planning. (June 2010) |
Media Coverage
|
Picking a New Director: Expert or Board Veteran? To quote from a recently published paper from the Rock Center for Corporate Governance at Stanford University by academics David Larcker, Eric So and Charles Wang: “Firms with…well-connected boards of directors earn superior risk-adjusted stock returns.” Social Media: What Boards Need to Know According to recent research by the Stanford Graduate School of Business, there is evidence that monitoring social media can alert the board to risks in a way that is not otherwise available. These risks might include: Operational risk. How exposed the company is to disruptions in its operations; Reputational risk. How protected are the company’s brands and corporate reputation; Compliance risk. How effectively the company complies with laws and regulations. The Efficacy of Shareholder Voting In the paper, The Efficacy of Shareholder Voting: Evidence from Equity Compensation Plans, which was recently made publicly available on SSRN, my co-authors (Christopher Armstrong of the University of Pennsylvania and Ian Gow of Harvard Business School) and I examine the efficacy of shareholder voting in effecting changes in corporate policy… Google Chairman Schmidt Received $101 Million Last Year "Schmidt was granted the equity awards with a target value of $100 million in connection with his transition last year to executive chairman, according to the filing. The awards will vest over a four-year period with no performance requirements, the filing said. “That kind of volatility in pay over time is unusual,” Larcker said. “But the awards of stock and stock options, those are expected values -- they could go up or down.” The Weekend Reader Taking stock of CEO compensation. Few boards look at how the CEO’s total wealth invested in the company changes as stock prices fluctuate. But they should, write David F. Larcker and Brian Tayan in McKinsey Quarterly. Larcker and Tayan say boards should do some benchmarking against peers to see if it raises questions about the financial incentives they’ve created for their CEO. “Is risk in line with industry peers, and, more importantly, is it in line with the company’s strategic objectives?” And if they want to avoid run-ins with activist shareholders, they better understand the dollar amount that the CEO can earn if “all the stars align” for the firm and its stock price rises sharply. Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans "Given the size, scope and complicated terms of the loans, their particulars constitute important stockholder information and therefore should be more fully disclosed, said David F. Larcker, a professor of accounting at Stanford University's Graduate School of Business..." Chesapeake's response to the above article is found here. Listening Without Prejudice: How the Experts Analyze Earnings Calls for Lies, Bluffs, and Other Flags "Confirming the legitimacy of the work of Mental Insights and BIA is an academic study published in 2010 by Stanford’s Rock Center for Corporate Governance. In coming up with their study, “Detecting Deceptive Discussions in Corporate Conference Calls,” accounting professors David F. Larcker and Anastasia A. Zakolyukina looked at more than 16,000 transcripts of US quarterly earnings calls from 2003 to 2007, focusing on the question-and-answer back-and-forths between analysts and executives..." Glass Lewis Makes an Attempt at Transparency, and Studies Try to Evaluate Proxy Advisory Services' Influence In a recent study trying to determine whether and how any of this matters, The Conference Board, NASDAQ, and the Rock Center for Corporate Governance at Stanford University surveyed 110 companies... Social Media and the Board: Why #Hashtags Should Matter to Directors The authors – Stanford Professor David F. Larker, Sarah M. Larcker and Brian Tayan – argue that social media might alert the board to risks facing an organization in a way that is not currently available. These risks might include operational risk (how exposed the company is to disruptions in its operations), reputational risk (how protected are the company’s brands and corporate reputation) and compliance risk (how effectively the company complies with laws and regulations)... Does your CEO compensation plan provide the right incentives? Few boards look at how the CEO’s total wealth invested in the company changes as stock prices fluctuate. They could—and they should. (April 2012) • David F. Larcker and Brian Tayan in McKinsey Quarterly Boards, shareholders, and journalists often look at a chief executive’s annual compensation plan to determine whether the company is offering the right incentives to increase shareholder value. But few consider another key question: how does the compensation that the CEO has already received over the years in the form of stock and stock options influence managerial decision making? Zynga Spent $1.37 Million to Protect Its CEO Sudden Death of a CEO: Are Companies Prepared When Lightning Strikes? It is very difficult for shareholders to know detailed information about CEO succession planning among the companies they have invested in. Although CEO deaths are rare, the sudden death of a CEO can provide insight into the quality of succession planning and governance of a company. Whereas some companies are able to appoint a successor immediately, others take weeks or months to do so. Say-on-Pay Votes Are ‘Working’ Listed companies are realising in growing numbers that the advisory firms’ advice has become more important to shareholders, a survey by The Conference Board, Nasdaq and The Rock Center for Corporate Governance at Stanford University has found. Boards Respond to Low 2011 SOP Votes Can Executives’ Speech Patterns Provide a Good Investment Guide? The first report focuses solely on the words an executive uses and is entitled Detecting Deceptive Discussions in Conference Calls, co-written by David Larcker, a professor of accounting at Stanford’s Graduate School of Business, and Anastasia A. Zakolyukina, a PhD candidate in accounting at Stanford. Early results appear promising, according to Larcker. He says “our (speech analysis) models do better than straight accounting models,” in predicting serious financial problems or the possibility of financial restatements by a material amount. Institutional Investor (March 2012) Institutional Investors Prod Companies to Make CEO Pay Changes During the second year of say-on-pay votes, institutional investors and their proxy advisers are prompting more companies to improve their CEO pay practices, according to a new report by the Conference Board, the NASDAQ OMX Group, and Stanford University's Rock Center for Corporate Governance. Institutional Shareholder Services (ISS) an MSCI Brand (March 2012) Federal Reserve: Checking the Paychecks “A lot of the votes seem to be driven by recommendations from proxy advisory companies,” says Stanford University Business School professor David Larcker. “They have models they’ve developed that make recommendations, and these recommendations are used by mutual funds and other big institutions and sometimes individual shareholders. What’s unknown is whether those recommendations are even remotely correct.” Federal Reserve-Richmond Research (February 2012) Micron CEO's Sudden Death Raises Wider Questions on Corporate Successions "According to a 2010 survey of North American CEOs and board members, only 54% are grooming an executive as a CEO successor. And 39% of survey respondents had no internal CEO candidate in mind, according to the survey by Stanford University's Rock Center for Corporate Governance and Heidrick & Struggles. The survey also found that only 50% of survey respondents said their boards had developed a written document detailing the required skills for the next CEO and that, on average, corporate boards only spent two hours a year discussing CEO succession planning. A board's nominating and governance committee, which are usually charged with finding a new CEO, spend on average only four hours, the survey found..." DailyFinance (February 2012) Governance Challenges and Priorities for 2012 Matteo Tonello, managing director of corporate leadership at The Conference Board, believes that the second year of say on pay in 2012 will provide researchers abundant information to study the actual influence of proxy advisory firms on the voting process. The Conference Board has recently partnered with NASDAQ and Stanford University’s Rock Center for Corporate Governance to investigate the issue and observers can look forward to more on this topic in the coming weeks Women Still Underrepresented on Corporate Boards Women hold roughly 15% of the seats on Fortune 500 corporate boards and the numbers are not growing rapidly, speakers told an audience of Stanford alumnae dedicated to increasing those numbers. Stanford GSB News (December 2011) Issuers With High Non-Audit Fees Under Fire David Larcker, an accounting professor at Stanford University, says he considers the percentage of non-audit work performed by an auditor to be a red flag rather than evidence that something is wrong, particularly if that work makes up 50% of the total bill from the auditor. His reasoning is that even before SOX restricted audit firms from doing certain kinds of non-audit work for their audit clients, his research indicated that “there was virtually no systematic evidence that the audits and the quality of accounting numbers were negatively affected [by that work].” Agenda (December 2011) Software That Listens for Lies "David F. Larcker, an accounting professor at the Stanford Graduate School of Business, audited a course in computer linguistics taught by Dr. Jurafsky and then applied its methods to analyze the words of financial executives who made statements that were later disproved." The New York Times (December 2011) Equilar C-Suite Insight Interview with David Larcker & Brian Tayan Larcker and Tayan discuss key topics for boards to consider.... It’s important to keep in mind that boards are supposed to do board things, and managers are supposed to do management things. The board is not meant to manage the organization. People tend to forget that boards have an advisory role and an oversight role... Equilar Inc. (November 2011) Split Decisions: Debating the Role of the CEO/Chair "David Larcker, a Stanford professor and author of the book Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences, says there can be times–for example if a company is struggling–when splitting the two roles could be advantageous, but each situation has to be looked individually." “I think putting everyone in the same box is definitely not the way to go,” Larcker says. “You have to examine these issues in the context of each company’s unique situation.” Boardmember.com (November 2011) Business-school research: Applying Dodd-Frank rules to collegiate sport ...inevitable coaching changes. Oh, and certain schools' programmes would be designated “too big to fail”. The authors, David F Larcker and Brian Tayan of Stanford's Graduate School of Business, apparently meant the exercise as a way of getting readers to think about which provisions of Dodd-Frank... The Economist (November 2011) Corporate Governance Matters but Not in the Way You Think James McRitchie, CorpGov.net reviews book "Corporate Governance Matters" by Larcker-Tayan. "The authors make a good case that corporate governance “suffers from considerable rhetoric.” Using available empirical evidence, they spend a considerable portion of the book debunking what are currently considered “best practices.” ... (October 2011) Peer groups: Clear drawbacks, but the jury is still out This article is excerpted by Directors & Boards magazine from the new book by Professor Larcker and researcher Brian Tayan titled "Corporate Governance Matters", FT Press. Directors & Boards, Third Quarter 2011 (October 2011) H-P Faces Wrath Of 'Activist' Analyst "David Larcker, a professor at the Stanford Graduate School of Business, said analysts taking a more vocal stance is an "interesting twist" in the H-P saga, noting that they certainly play a key role." Morningstar (September 2011) Meg Whitman Would be 'Insider-Outsider' CEO at H-P 'You're not good enough. You're never going to get promoted,'" says Jeffrey Pfeffer, a professor of organizational behavior at Stanford University's Graduate School of Business. That could send some executives toward the exit, he says. But sometimes it should also be taken as a sign of problems, says David Larcker, also a professor at Stanford and director of the business school's corporate governance research program. "When you bring in someone from the outside, that means [a company] hasn't developed the right people internally." Wall Street Journal Online (September 2011) CEO careers: A case of rinse and repeat? In the game of corporate musical chairs, room is often made for even those from disgraced companies, according to a new Stanford study, called "Scarlet Letter: Are the CEOs and Directors of Failed Companies 'Tainted'?" CNNMoney/Fortune (September 2011) DavisPolk Briefing: Governance: Governance Survey Questions Current Thinking on Board Composition The 2011 Corporate Board of Directors Survey from Stanford's Rock Center and Heidrick & Struggles suggests that active CEOs may not make the best board members. We asked Professor David Larcker, corporate governance expert at Stanford, to discuss those and other findings. DavisPolk Briefing (September 2011) Corporate Governance Matters: Lessons for Practitioners A synthesis of the book "Corporate Governance Matters." ...Brian Tayan and I recently co-authored a book, titled Corporate Governance Matters, which takes an organizational perspective, rather than a legal perspective, on the important topic of modern corporate governance. The Harvard Law School Forum On Corporate Governance and Financial Regulation (September 2011) Do CEOs Make the Best Board Members? A new survey from Stanford's Rock Center and Heidrick and Struggles examines the pros of CEOs serving as board members. Active CEOs might be "too busy" to be effective and, say the researchers, CEOs may be more tainted by ethics lapses than board directors. Coverage by The Educated Exec (September 2011) Mum on Succession, Board Got Heat "I think Apple has done a great job at this," said David Larcker, a professor at Stanford University's Graduate School of Business and director of its corporate-governance research program. He said Apple performed well with Mr. Cook at the helm during Mr. Jobs's leaves, as its financial results, and stock price, continued to rise. Nays on Pay: The Story Behind the Votes "...David F. Larcker, the James Irvin Miller Professor of Accounting at Stanford University’s Graduate School of Business and Rock Center for Governance, finds it interesting that all the say-on-pay defeats also had an “against” recommendation from ISS..." Corporate Board Member Magazine (August 2011) The Council for Corporate Responsibility August newsletter features the Seven Myths of Corporate Governance (August 2011) Ernst & Young Deaf, Dumb, And Blind About News Corp. Francine McKenna in Forbes Blog. Stanford University Professor David Larcker, in his new book, Corporate Governance Matters, says the average for audit committee meeting frequency is seven ...(July 2011) The Corporate Library weighs in on executive compensation myths in response to the Seven Myths of Executive Compensation. (July 2011) Talking Points: Seven Myths of Executive Compensation Professor David Larcker joined Corporate Board Member to discuss and debunk his seven myths of executive compensation. (July 2011) Are Boards Getting Better at CEO Hiring? In a study published last year by Heidrick and Stanford University’s Rock Center for Corporate Governance, Miles and Stanford business school professor David Larcker found that more than half of the companies surveyed couldn't immediately name a successor if the CEO left. AgendaWeek.com (June 2011) Myths of Executive Compensation Explored The Hartford Business Journal discusses book "Corporate Governance Matters," with co-authors. NACD Directors Daily - Compensation (June 2011) The Time Is Now to Link Succession Planning to Compensation " The National Association of Corporate Directors recently cited a study by David Larcker and Stanford’s Rock Center for Corporate Governance indicating that 46 percent of executives say their companies are not actively grooming CEO successors." NACD Directorship (June 2011) Books for Board Members’ Beach Blankets: Corporate Governance Matters Agenda discusses new book, Corporate Governance Matters. (May 2011) Alpha, Beta, Being There and Performance Measurement “'What's funny about pay is that when the market is going up, it covers a lot of sins', said David F. Larcker, director of the corporate governance research program at the Stanford Business School. It is when the market 'is going sideways or down that funny things happen,' he said: Considering some of the current pay packages, shareholders want to see strong results.'” Information Management (May 2011) Rajaratnam Conviction Serves As Powerful Warning Shot On Wall Street "We've just been bombarded with a whole series of ponzi schemes, meltdowns and people making an enormous amount of money," said David Larcker, professor of accounting at the Stanford Graduate School of Business and author of Corporate Governance Matters. "The government is saying here 'look, let's pull it back to the middle here and show the population that we are serious about this -- that you can't just do anything you want.'" Huffington Post (May 2011) Slippery People: Corporate Governance at Berkshire Hathaway "That feeling is best explained by a quote of mine that ended up in a paper dated April 21 by Stanford University Graduate School of Business Professor David Larcker and his research associate, Brian Tayan. re: Theauditors (April 2011) Berkshire gets tough with Sokol as annual meeting nears “I thought they laid out the details in a very transparent and clear way,” said David F. Larcker, an accounting professor and director of the Corporate Governance Research Program at Stanford’s graduate business school. “They were tough, and I think that’s a good thing.” NY Times Dealbook (April 2011) |
Green Mountain Margin Call Latest Sign Market Is Stuck in 1929 "I don't think there is anything fundamentally wrong with this as long as it's disclosed and the board approves it," says David Larcker, an accounting professor at the Stanford Graduate School of Business and director of its Corporate Governance Research Program. "I think it is very controversial where the board would step up and bail out [an executive]. Is that in shareholder interests?" Chesapeake director lent money to CEO David Larcker, a corporate governance specialist and professor of accounting at the Stanford University Graduate School of Business, concludes, “For an independent board member on the compensation and corporate governance committees to be doing a deal with the CEO, that’s something that would be inappropriate governance and that should be disclosed.” Exclusive: Chesapeake board member lent money to CEO McClendon "For an independent board member on the compensation and corporate governance committees to be doing a deal with the CEO, that's something that would be inappropriate governance and that should be disclosed," said David Larcker, a corporate governance specialist and professor of accounting at the Stanford University Graduate School of Business. Big Board Dealt Big Rebuke Corporate governance has a greater significance for NYSE Euronext because the exchange group enforces listings standards for the companies whose shares trade on its markets, according to David Larcker, a professor at the Stanford Graduate School of Business. Who Will Replace the Oracle of Omaha?.. Who Mr. Buffett's successor will be. That is more unusual than you might think. "Succession planning at most companies is a hollow exercise," says David Larcker, an expert on the topic who teaches at Stanford University's business school. "It's rare to have a plan in place where you... Who Mr. Buffett's successor will be. That is more unusual than you might think. "Succession planning at most companies is a hollow exercise," says David Larcker, an expert on the topic who teaches at Stanford University's business school. "It's rare to have a plan in place where you... Wal-Mart's board: Can they handle the Mexican heat? "This is one of these nightmare situations for the board," said David Larcker, director of the corporate governance research program at Stanford's business school. "You have a responsibility to do risk management and pay attention to all these kinds of issues, but the problem is that, as a board member, you're not out there doing the internal auditing. You have to rely on information provided by managers." Corporate Governance Glossary Is Helpful Guide to Terminology From audit committee to zero-cost balance, the terminology used in the corporate governance arena can sometimes be overwhelming. The Rock Center for Corporate Governance at Stanford's Graduate School of Business has established a helpful and comprehensive Glossary of Corporate Governance terms.To view the glossary, which is updated regularly, please visit: http://www.gsb.stanford.edu/cgrp/research/glossary And Buffett's Successor Is... "Succession planning at most companies is a hollow exercise," says David Larcker, an expert on the topic who teaches at Stanford University's business school. "It's rare to have a plan in place where you know the next day [after a CEO dies] exactly what you're going to do." Something for the weekend While most consumers (89 per cent) use search engines to research products and services that they might buy, 42 per cent also follow or “like” a brand on a social networking website, point out David Larcker, professor of accounting, and researchers Brian Tayan and Sarah Larcker. This could be valuable in setting the strategy of the company say the authors in their research. CEO Pay Encourages Bigger Risks at Two of Top Four Banks Boards should take care that incentives encoded in accumulations of stock and options awards are not “encouraging something unintended,” says Brian Tayan, a researcher at the Stanford Graduate School of Business who co-authored a paper on the subject this month with David Larcker, an accounting professor there. How “Connected” is Your Board? A new working paper from Stanford University Rock Center for Corporate Governance, by David Larcker, Eric So, and Charles Wang, is worth a read. The paper, titled Boardroom Centrality and Firm Performance, finds that “Firms with central or well-connected boards of directors earn superior risk-adjusted stock returns.” According the paper, this is just one of several benefits that centralized boards accrue to their companies. The Case Against the Business Case: Focusing on financials can be bad for business To use an extreme example: “We’ve all been in a situation where someone in Accounting goes berserk over a cab fare or because you had an extra French fry,” says David Larcker, the James Irvin Miller Professor of Accounting at Stanford’s Graduate School of Business. “Going back and forth about business cases for such things is not worth it. Just pay it. Otherwise, you’ll piss off people.” Worse, you may waste time and effort struggling to make business cases for business cases. IR Papers: Bring on the tough questions A roundup of academic research from the world of IR studies... Shareholders don’t care for your CEO’s equity compensation plan? Tell your boss not to sweat it: the yacht is safe. Researchers for Stanford’s Rock Center for Corporate Governance find little statistical evidence that either lower shareholder voting support for – or outright rejection of – proposed equity compensation plans leads to any decrease in the level or composition of future chief executive incentive compensation. The Influence of Proxy Advisory Firm Voting Recommendations The Harvard Law School Forum on Corporate Governance and Financial Regulation (April 2012) This post is based on a Conference Board Director Note by David F. Larcker, Allan L. McCall, and Brian Tayan; the full publication, including charts, survey results, and footnotes, is available.. Inside a glass house at Morningstar We also exchanged emails with Stanford Business School Professor David Larcker, whose book (co-authored with Stanford researcher Brian Tayan) on Corporate Governance is cited by Morningstar as a reason for shareholders to reject the proposal. In responding to the proposal, the company says, “(The authors) concluded that most studies regarding the impact of separating the chairman and chief executive officer roles have found little or no evidence that separation leads to improved corporate outcomes.” In our email exchange, Larcker wrote: “the evidence is extremely mixed on whether there is a positive impact on shareholder value..." According to a new report by the Conference Board, the NASDAQ OMX Group, and Stanford University’s Rock Center for Corporate Governance, many companies are improving their pay and disclosure practices. Of the surveyed companies, 72 percent said they review the voting policies of proxy advisory firms or engage with an advisory firm to get feedback on compensation practices. CFA Institute (March 2012) This report examines current evidence regarding the influence of third-party proxy advisory firms’ voting recommendations on shareholder proposal voting outcomes, particularly say-on-pay votes. It also presents the findings of a study, conducted by The Conference Board, NASDAQ, and the Rock Center for Corporate Governance at Stanford University, which shows that proxy advisory firms have a substantial impact on the design of executive compensation programs. However, the impact of those firms on governance quality and shareholder value is still unknown. Boardmember.com (March 2012) Why Is Silicon Valley So Clueless About Stock Options? Forget complex valuation methods like Black-Scholes – most employees do not even “understand the basic economics of stock options,” say Stanford professor David Larcker and Wharton’s Richard Lambert in one study. In a different survey, employees with stock options reported that: 39% knew “little” or “nothing” about their options and 52% knew “little” or “nothing” about the tax implications of exercising. Forbes-CIO Network (March 2012) "It's tough to handle that high-profile role if you are running your own company," says David Larcker, a Stanford University accounting professor and corporate-governance expert. Joann S. Lublin, Wall Street Journal (February 2012) U.S. SEC presses BNY Mellon for better disclosure David Larcker, a Stanford University accounting professor and corporate governance expert, said growth rate computations using a negative base number are always problematic. "To their credit, they acknowledge that this is not a meaningful number," Larcker said. Most of the companies in BNY Mellon's 12-member peer group made money in 2009 and showed strong profit growth in 2010, according to their financial statements. Reuters (February 2012) Zuckerberg Controlling 57% of Facebook Seen as Risk to Investors “Zuckerberg controls the vote and, because of that, they don’t have to adhere to the strict rules of public companies,” said David Larcker, professor at Stanford University’s Rock Center for Corporate Governance. Bloomberg (January 2012) Split Decisions: Debating the Role of the CEO/Chair "David Larcker, a Stanford professor and author of the book Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences, says there can be times–for example if a company is struggling–when splitting the two roles could be advantageous, but each situation has to be looked individually." Boardmember.com (December 2011) Now hiring: Corporate boards. Applicants beware. And "more than half of directors think that board turnover is too low" according to a survey by the Rock Center for Corporate Governance at Stanford ... Fortune (December 2011) Linguistic Deception Detection: Part 1 This post is a first installment, looking at the work of David Larcker and Anastasia Zakolyukina ("Detecting Deceptive Discussions in Corporate Conference Calls", Rock Center for Corporate Governance, Working Paper No. 83, July 2010). University of Pennsylvania (December 2011) H-P Grants Activist Shareholder Board Seat "Mr. Whitworth is a veteran activist who has served on many corporate boards. He isn't known "for going along with the status quo," said David Larcker, an accounting professor at Stanford University's business school who runs its corporate-governance research program. Mr. Whitworth likely will be "a pretty active an "aggressive player in vetting new people and strategies." Wall Street Journal (November 2011) The Alsop Perspective: Getting More Women on Boards Stanford, along with a few other universities, is doing its part to promote such women and create more gender diversity on corporate boards. The schools are offering special educational programs, conducting research studies, and building databases of promising female candidates. Graduate Management News (November 2011) Directors Dread the Pay Ratio Rule “Boards will almost certainly have to deal with the optics and public relations aspects of this type of pay ratio,” writes David Larcker, professor of accounting at Stanford University, in an e-mail. Agendaweek.com (November 2011) ... In the business and legal communities, there is controversy over whether Jobs and Apple went far enough with their disclosure. Perhaps the only American CEO who rivals Jobs in influence, Warren Buffett, CEO of Berkshire Hathaway, opined in a Stanford Graduate School of Business report: "If I have any serious illness, or something coming up of an important nature such as an operation or anything like that, I think the thing to do is just tell Berkshire shareholders about it..." Chicago Tribune (October 2011) "In order for the vote to follow the ISS /Glass Lewis recommendations, they would need to either be correct in their recommendations or, if the proxy advisors are not correct, they [proxy advisors] could still change the vote outcome if the number of shares that are simply voted in lock-step [100 percent in accordance] with ISS recommendations is sufficient,’ says Allan McCall, a member of the accounting department at Stanford Graduate School of Business. ‘... McCall notes that ISS recommendations over the years have supported News Corp’s board and calls into question the role of the proxy advisory firm. ‘In 2010, ISS recommended voting for the entire slate of directors [but] if there was a problem with the board oversight (as other reports suggest) then why was this not recognized earlier?’ Corporate Secretary.com (October 2011) Nays on Pay: The Story Behind the Votes Others are not convinced by this argument. David F. Larcker... finds it interesting that all the say-on-pay defeats also had an “against” recommendation from ISS. Of course, he points out, this does not mean that ISS alone caused the defeat. “Based on our research, we find that ISS can influence somewhere around 30% of the votes for a typical company,” Larcker says. “However, the fundamental unresolved question is whether the approach used by ISS in developing [its] voting recommendations can actually identify firms with flawed compensation practices and bad governance..."Boardmember.com(October 2011) Apple's Game Plan: Avoiding Culture Shock "The rare thing [Apple] had on their side was time," said David Larcker, director of the Corporate Governance Research Program at Stanford University... Wall Street Journal (October 2011) What would happen if the NCAA adopted Dodd-Frank? Professor Bainbridge answers some of the questions in the Stanford Closer Look titled " The NCAA Adopts “Dodd-Frank”: A Fable". There is an odd disconnect between the internal logic of Dodd-Frank’s governance provisions and the back story of the financial crisis. says Professor Bainbridge... Stephen Bainbridge's Journal of Law, Politics, and Culture (October 2011) Does Corporate Governance Matter? A Review Of A New Book By David Larcker and Brian Tayan Review of book by Francine McKenna of @re:theauditors in Forbes (September 2011) The Language of C-Suite Deceit "Fascinating Stanford paper instructs how to tell if a CEO, or a CFO, is lying about the numbers -– and how the untruths of one can be distinguished from those of the other." CFOWorld.com cites research by Professor Larcker and Phd candidate Anastasia Zakolyukina (September 2011) HR Can Play Influential Role in Helping Boards Manage Risk ... think that is shortsighted,” said David Larcker, a professor at the Stanford Graduate School ... Society for Human Resource Management (August 2011) Residential broker has big plans for 555 Madison The business model, which was the subject for a case study at the Stanford Graduate School of Business, is what attracted Mr. Bracha to Keller Williams. Crains NY CEOs Not Always the Best Directors: Study The popular consensus is that CEOs make the best board members because of their current strategic and leadership experience,” says David Larcker, professor at the Stanford Graduate School of Business and coauthor of Corporate Governance Matters, in a statement. Instead of looking for big-name appointees, boards should concentrate on “what this person will actually deliver in value,” he says. Agenda (August 2011) “The challenge of getting rid of board members is that there is a widespread assumption of board "tenure,'” said David Larcker, a corporate governance expert at Stanford. “You may want to bring them on for three to five years, but they end up staying for 10. It's difficult to get rid of an underperforming or irrelevant director who just happens to stay on too long.” Investment News (August 2011) Q&A: Pay Disclosure May Help Companies Boost Performance (subscription required) Q&A with Professor Larcker where he discussed with Dana Wilkie of Bloomberg Brief-Financial Regulation how executive pay disclosure may encourage PwC Will Answer For Centro But Judge Slams Directors First (July 2011) Francine McKenna in Forbes Blog cites Professor David Larcker and Michael Klausner on directors liability and D&O insurance. (July 2010) Reader Profile: David Larcker. Stanford Graduate School of Business Discussion with Directors & Boards on new book, Corporate Governance Matters. (July 2011) #6 "Be wary of my rosy outlook ...David Larcker and colleagues at Stanford analyzed the transcripts of earnings calls where CEOs were discussing results that would later be substantially revised downward..." Wall Street Journal: Smart Money (July 2011) What’s the Value of Corporate Governance? Book excerpt -new book examines the links between formal board independence and improved corporate outcomes. NACD Directorship (June 2011) Critics of High Executive Pay Miss Their Mark, Authors Say "Executive compensation may be the lightning rod for shareholders in the wake of the financial crisis, but the truth about how pay should be structured is clouded by a lot of popular myths." Society for Human Resource Management (June 2011) CEO pay at U.S. companies has taken off again Discussion of executive compensation packages with the Democrat and Chronicle. (June 2011) Executives' Words Contain Clues to Deception Stanford Business Magazine Online: Language may be a better predictor of a company's health than accounting reports, says research by David Larcker. (2010/2011) Study: Proxy Firms Can Harm Shareholder Value Business Insider cites a recent study released by The Rock Center for Corporate Governance at Stanford University that shows that firms that adopt stock option exchange programs consistent with ISS policies tend to exhibit lower market reaction and operating performance and higher executive turnover. (May 2011) Proxy Advisory Firms and Stock Option Exchanges Harvard Law School Forum on Corporate Governance and Financial Regulation discusses Stanford paper "Proxy Advisory Firms and Stock Option Exchanges: The Case of Institutional Shareholder Services." (May 2011) Companies Deserve Pay Transparency, Too In writing this post, I found an April 19 article from Stanford Professors, David Larcker and Brian Tayan discussing whether the voting recommendations from Institutional Shareholder Services (ISS) and other proxy advisory firms actually create shareholder value... Forbes Blog-Executive Pay Watch by Robin Ferracone (May 2011) Berkshire Hathaway Gets An "I" For Incomplete On Sokol Investigation That criticism was quoted in a case study on this incident prepared by Stanford University’s Graduate School of Business: "A third contended that Berkshire Hathaway’s board was in part to blame: |
- Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences
By David Larcker and
Brian Tayan, FT Press, 2011
- FT Press, 2011
.