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Media Mentions - Corporate Governance

Links to the articles posted below may be changed by the owners after they are published here. In addition, some sites require registration and/or a fee for viewing the article online.

November 2009

Insider Trading: How is a Secret Best Kept?
Huffington Post, November 18, 2009
Even the requirement of trading plans doesn't seem to have stopped many executives from using corporate secrets to their financial advantage. Stanford Graduate School of Business professor Alan Jagolinzer analyzed over 117,000 trades performed pursuant to publicly disclosed 10b5-1...

Many clearinghouses may raise OTC derivatives risk
Reuters, November 11, 2009
 ... run the risk of increasing the systemic risk posed by OTC derivatives trading, said Darrell Duffie, professor of finance at Stanford University.

October 2009

Case casts spotlight on rules for dealing by executives
Financial Times, October 21, 2009
Professors Dave Larcker and Joe Grundfest cited. "There are varying degrees of enforcement on this," said David Larcker, a professor at Stanford's Graduate School of Business specialising in corporate governance. "In some companies, every trade you make..."

Corporate Governance Ratings
The Conglomerate Blog, October 5, 2009
Gordon Smith comments on the Rating the Ratings: How Good are Commercial Governance Ratings? research paper by Professor's David Larcker, Rob Daines and Ian Gow.

September 2009

CalPERS and CalSTRS: moving beyond ‘male, pale, stale’
Capitol Weekly, September 17, 2009
"California’s two big public pension funds, CalPERS and CalSTRS, are taking steps to break up the old-boy club at the top of corporations, pushing for more women and minority directors on boards some say tend to be “male, pale and stale.” The conference, “Diversity on Corporate Boards: When Difference Makes a Difference,” was sponsored by CalPERS, CalSTRS, Stanford Law School and The Rock Center for Corporate Governance.

Creating 'a Bigger Mess?' Battle Lines Are Drawn on the Proxy Access Rule
Knowledge@Wharton, September 02, 2009
"David F. Larcker, an accounting professor and co-director of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University, calls the SEC's proposal "a big deal. It's sort of like shareholder democracy," he says. "You're basically opening up the proxy machinery to an additional set of people. Once you change the board, if the board is active, it would have an impact on what the company does.... The proxy access [proposal] is not trivial by any stretch of the imagination."
Related: Debating Shareholder Democracy
The New York Times, September 4, 2009

More to Say on Executive Pay
Institutional Investor, September 1, 2009
“Any regulatory restriction on compensation can be and will be circumvented by any financial institution that wants to do so,” asserts Dirk Jenter, a finance professor and executive compensation expert at Stanford Graduate School of Business..."

August 2009

The Latest Insider-Trading Worries
Corporate Board Member, August 1, 2009
From July/August 2008 - The study, by Alan Jagolinzer, an assistant accounting professor at Stanford University's Graduate School of Business, examined some 117,000 trades of insider stock by 3,426 executives at 1,241 companies from October 2000 to December.

July 2009

Medarex's Pien Passes Up a Windfall
Wall Street Journal, July 29, 2009
"...research by Stanford University professor Alan D. Jagolinzer concludes that 10b5-1 trades are actually more predictive of future stock movements than other transactions. He proposes that one explanation is that insiders often don't behave the way Mr. Pien did."

"Early termination would remove sales that would otherwise be nonprofitable, so sales that are retained likely reveal modest patterns of strategic trade," Mr. Jagolinzer wrote in a recent paper."

Does Corporate Governance Matter?
The Street.com, July 22, 2009
"Although most people intuitively think that it's a good thing for the performance of a company and its own risk management to have a strong and independent board of directors overseeing it, last year a group of Stanford professors [Prof. Dave Larcker, et al.] published a working paper in which they questioned this basic assumption."

Making Sense of the Dip in Securities-Fraud Cases
Wall Street Journal Blogs, July 21, 2009
... as a side effect of the larger trend to sue financial services firms, wherever they are headquartered,” said Stanford law professor Joseph Grundfest. ...

US Department Of The Treasury Press Release cites study on compensation
US Department of the Treasury, July 16, 2009
A study by Chris Armstrong and Christopher Ittner of the University of Pennsylvania and David Larcker of Stanford found that the use of consultants was most closely correlated with higher CEO pay most when other shareholder protections are weakest, noting that "compensation consultants provide a mechanism for CEOs of companies with weak governance to extract and justify excess pay."

Stanford Business School Research Underpins SEC Scrutiny of Scheduled Insider Trades
Stanford GSB News, July 2009
In the wake of alleged misconduct by executives at Countrywide Savings, Novatel, and Qwest, research by Stanford accounting professor Alan Jagolinzer may be prompting the Securities and Exchange Commission to rethink rules that permit scheduled trading by insiders.

Valuation Adjustments Endanger 2Q Earnings
American Banker, July 9, 2009
"When a bank's credit quality goes down, the market value of the bonds that it issues goes down, because those IOUs are worth less, and if it's worth less to you, then it's a lower liability to me," said Darrell Duffie, a finance professor at Stanford University's Graduate School of Business. "But it's a two-sided sword," meaning that as a bank's creditworthiness improves, so does the value of its IOUs and, by extension, its liabilities.

June 2009

Insiders' Preset Plans Portend a Prescience
Wall Street Journal, June 24, 2009
Prof. Alan Jagolinzer's research study on prepaid variable forward contracts is cited.
Related:
-Mozilo case sparks new scrutiny of CEO trading plans
Reuters, June 12, 2009
- Executives' Stock Deals Preceded Price Drops
Wall Street Journal, June 4, 2009
- Stealth Insider Selling: Is An Exec Secretly Selling Your Stocks
CNBC, June 4, 2009

Do CEOs Matter?
The Atlantic, June 1, 2009
Prof. Jeffrey Pfeffer is quoted: "...Good leaders can make a small positive difference; bad leaders can make a huge negative difference...”

Make Cost Cutting Invisible to the Customer
BNET Blog, June 1, 2009
Prof. Jeffrey Pfeffer article expounding on The Corner Office-taking on the big questions facing CEOs, boards, and shareholders.

May 2009

The Right Way to Pay
Forbes, May 11, 2009
Prof. David Larcker says companies can measure performance one of three ways: by stock price gains (with or without dividends added), by accounting measures (like profit gains) and by nonfinancial indexes like customer satisfaction and employee turnover.

BofA Directors Continue to Support Lewis
Wall Street Journal , May 1, 2009 (subscription to access)
"The board is full of people that [Mr. Lewis] put there, added Dirk Jenter, an assistant professor of finance at Stanford University. "That makes it difficult to remove Ken Lewis."

April 2009

Risky -- and Necessary
The Washington Post, April 3, 2009
Professor Jeffrey Pfeffer discusses senior leadership succession.

A Tale of Two Markets- Are your D&O premiums about to soar? That depends on which industry you're in
CFO.com, April 1, 2009
"Litigation activity against the financial sector may decline next year because the supply of new defendants might be drying up," says Grundfest of Stanford Law School's clearinghouse [and Rock Center for Corporate Governance].

March 2009

Effectiveness of board of directors of companies
The Economic Times, March 20, 2009
Professor Dave Larcker's article discussing board effectiveness and how the board characteristics commonly accepted as key (e.g. independence, etc.) may not be the right elements to focus on.

ISS Gave Your Board a Lousy Rating: Should You Care?
Boardmember.com, March 2009
Faculty research on governance ratings has struck a nerve as RiskMetrics (formerly ISS) may be revamping their scoring methods.

Financial Institutions Caused this Crisis Says Wells Fargo’s Kovacevich video icon
The current financial crisis was caused by financial institutions themselves, not by their customers, Richard Kovacevich, MBA ‘67, chairman of Wells Fargo, told a Stanford audience. Financial institutions exhibited a total disregard for basic risk management fundamentals “and even common sense.” It was fueled by greed, lapses in ethical behavior, and was unchecked by the ratings agencies he told a gathering of business and academic leaders at the day-long program organized by the Stanford Institute for Economic Policy Research on March 13.

February 2009

Recipe for Disaster: The Formula That Killed
Wall Street
Wired.com, February 23, 2009
"The corporate CDO world relied almost exclusively on this copula-based correlation model," says Darrell Duffie, a Stanford University finance professor who served on Moody's Academic Advisory Research Committee. The Gaussian copula soon became such a universally accepted part of the world's financial vocabulary that brokers started quoting prices for bond tranches based on their correlations."

Audit Firms' Global Ambitions Come Home to Roost
BusinessWeek, February 2, 2009
"All of them have structures designed to build fire walls" between local companies and the global firm, says Stanford law professor and former SEC commissioner Joseph A. Grundfest. "The question is, will the dikes hold when you have this kind of a flood?"

January 2009

CEO Firings On the Rise As Downturn Gains Steam
The Wall Street Journal, January 13, 2009
"CEO turnover "doubles in bad times," said Dirk Jenter, an assistant finance professor at Stanford University's business school, who recently analyzed 1,627 CEO changes between 1993 and 2001. Mr. Jenter found that CEOs are most vulnerable in a downturn when their employers' shareholder returns lag rivals."

Can Apple Survive Without Jobs?
Time, January 8, 2009
"Plenty of companies with charismatic leaders can still thrive after they're gone, says Jeffrey Pfeffer, a professor at Stanford University's business school... "Most company leaders do what everyone else does," says Pfeffer. "The genius of Jobs is to get his company and its people to get out of that rut--to not follow the crowd but lead it."

Was Apple 'Adequate but Late' on Jobs?
BusinessWeek, January 6, 2009
"Joe Grundfest, co-director of the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University, says securities lawyers could "get a good debate going" over whether Apple was as forthcoming as necessary. "Some will say this is good enough, and some will argue that we finally have disclosure and that it's adequate but late," Grundfest said."

Apple’s Jobs Explains His Weight Loss
The New York Times, January 6, 2009
"Joseph A. Grundfest...a former member of the Securities and Exchange Commission, said there was little agreement among legal scholars about the responsibilities of a company when its chief executive became ill. ''Among the arguments that are made is that the C.E.O. has certain privacy rights,'' ...'The counterargument to that is there is nothing in federal securities laws about privacy rights.''

December 2008

A Rewrite for Writedowns? SEC signals openness to fair-value change
American Banker, December 16, 2008
Prof. Darrell Duffie states: "investors need unfiltered information about volatility in the market to make their own informed decisions."

November 2008

Credit derivatives: The great untangling
The Economist , November 8, 2008
Professor Darrell Duffie quoted on the credit derivatives issue.

October 2008

Derivatives and Mass Financial Destruction
The Wall Street Journal, October 22, 2008
Article by GSB Professor Darrell Duffie.

Bailouts tied to curbing executive pay; Public outrage driving governments to act, but questions of enforcement remain
Globe and Mail, October 15, 2008
"Public outrage that governments are pouring money into banks that have rewarded underperforming executives is driving the change, said David Larcker, a compensation expert at Stanford University in Palo Alto, Calif."

Analyst says Wachovia bids could come at a cost
Forbes.com, October 7, 2008
Joseph A. Grundfest, Arthur and Toni Rembe Rock Center for Corporate Governance is quoted.

MBA students take stock ; The new mantra: Doing good is better than greed
USA Today , October 2, 2008
Stanford MBAs weigh in on the current credit crisis.

September 2008

Stanford, GSB Professors Debate Bailout Plan
Stanford GSB News, September 2008
Panel discussion ran the gamut from how the U.S. got into this mess; how this crisis fits in with past credit crises; and whether the financial sector is really sufficiently “different’’ than the rest of the economy to warrant a $700 billion rescue courtesy of the American taxpayer.

Related: Effects of the Government Takeover of Freddie Mac and Fannie Mae Video Video

Study: You Can’t Always Trust the Ratings
Compliance Week, September 16, 2008 (requires registration)
Compliance Week's coverage of the Stanford research paper entitled Rating the Ratings: How Good Are Commercial Governance Ratings?

Credit Crisis Raises Pay-Structure Concerns
Agenda, September 8, 2008 (requires registration)
"The credit crisis has prompted calls for rethinking the structure of pay, particularly at financial services organizations." Professor David F. Larcker weighs in on this issue.

August 2008

Committee on Capital Markets Regulation Reports on Competitiveness of the U.S. Derivatives Market
PR Newswire , August 12, 2008
Discusses research findings on the US derivatives market conducted by Professor Darrell Duffie et al. (Research Paper Abstract)

Clamour grows to rein in rich CEO payouts
The Globe and Mail, August 5, 2008
Professor David F. Larcker weighs in on CEO pay and problematic risk adjusted payouts.

July 2008

Yahoo on hot seat despite truce with Icahn
San Francisco Chronicle, July 30, 2008
David Larcker, co-director of the Rock Center for Corporate Governance is quoted: "... even if Yahoo's leadership gets through the shareholder meeting unscathed, investors will turn up the pressure within the next year, absent any progress at the company..."

Lifting the Lid: New study takes aim at governance grades
Thomson-Reuters, July 3, 2008
Coverage of the Stanford study on commercial corporate governance ratings.

The Latest Insider-Trading Worries
Boardmember.com Magazine, July/August 2008
(free registration required to access)
Boardmember magazine cites Professor Alan Jagolinzer's study on 10b5-1 trading plans in an article discussing insider trading concerns.

June 2008

How Good Are Commercial Corporate Governance Ratings?
Stanford GSB News, June 2008
New research study entitled "Rating the Ratings: How Good Are Commercial Governance Ratings?" by Professor's David F. Larcker, Robert M. Daines and doctoral student Ian Gow casts doubt on the merits of corporate governance ratings.

Who's Watching the Watchdogs?
Fortune, June 26, 2008
Professor's David F. Larcker and Robert M. Daines research paper on commercial corporate governance ratings produced for 2005 by Audit Integrity,
RiskMetrics (previously Institutional Shareholder Services), GovernanceMetrics International,
and The Corporate Library indicate that the level of predictive validity for these ratings seems well below the threshold necessary to support the bold claims made for them.

Poison Pills Target Derivatives
The Wall Street Journal, June 18, 2008
Rock Center faculty affiliate and Stanford Law School Professor Ronald Gilson quoted in article discussing the need for hedge funds to increase transparency by reporting derivative positions.

May 2008

Execs often show good timing with stock-sales plans
USA Today, May 28, 2008
New research study on 10b5-1 trading plans conducted by Professor Alan Jagolinzer indicates that executives that provide the most detail about their pre-planned stock sales, time the market most judiciously.
[Research Paper Abstract]

April 2008

Trading Plans Offer A Good Clue to Sell --- Aggressive 10b5-1s Especially Predict Underperformance
The Wall Street Journal, April 9, 2008
10b5-1 research conducted by Professor Alan Jagolinzer

Excessive Executive Pay Makes Headlines, But So What?
Stanford GSB News, April 2008

March 2008

Hands-Off Options
Vanderbilt Law Review, March 1, 2008
Professor Alan Jagolinzer 10b5-1 study highlighted in Jesse M. Fried's study on executive compensation.

Changing Recruitment Opens More Boards to Women
Stanford GSB News, March 2008
Just 15 percent of board seats for Fortune 500 companies go to women, with those who have managed profit-and-loss units more likely to be recruited. A sold-out event in New York for Business School alumnae discussed “How and Why to Join a Board.” Event sponsored by the Women’s Initiative Network (WIN) [Details]

February 2008

Doing the “Wall Street Walk” As a Kind of Shareholder Activism
Stanford Knowledgebase, February 2008
Major shareholders register their dissatisfaction with corporate management through the "Wall Street Walk", selling their shares. Business School Professors Anat Admati and Paul Pfleiderer find that this threat—with its potential to cause a stock price fall—can significantly impact the behavior of top management.

January 2008

Backdating probe had surprises for investigators; SEC team behind stock-options cases think abuses have been corrected
Marketwatch, January 19, 2008
Professor David Larcker is quoted: "The accounting principles and rules involved in the options backdating issue were clear. It's not like this is some kind of obscure accounting standard," he said. "They must have thought that the chances of getting caught were zero. For some of these companies, it must be hubris."

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