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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.

July 2008

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

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."

December 2007

INSIDE TRACK Preplanned Sales: What Do They Show?
Jakks CEO's Move May Signal Decline In Firm's Prospects
The Wall Street Journal, December 19, 2007
References Professor Alan Jagolinzer's 10b5-1 trading plan study.

Outside Counsel; News; Increased SEC Scrutiny of 10b5-1 Plans on Horizon?  
New York Law Journal, December 3, 2007
(Subscription Required)
Mentions 10b5-1 trading plan study conducted at Stanford Graduate School of Business.

November 2007

Programmed stock trading plans eyed; Front Page; SEC's attention rattles boardrooms
The National Law Journal, November 5, 2007 (Subscription Required)
Potential abuse by corporate insiders of programmed stock trading plans has caught the attention of the SEC and rattled the nerves of corporate boards, which are scrambling to make sure the plans pass muster. Article discusses Professor Alan Jagolinzer's research on 10b5-1 trading plans.

October 2007

Lucky stock sale may bring down Godzilla
Times Online, October 21, 2007
Professor Jagolinzer reported that sales under the 10b5-1 plans tended to follow good news and also tended to precede bad news to an extent that looked systematic. “Collectively, this suggests that, on average, trading within the rule does not solely reflect uninformed diversification,” Jagolinzer put it. The study attracted the attention of a regulator, the Securities and Exchange Commission.

Spotlight Shines Brighter on Comp Committees
Agendaweek.com, Oct 15, 2007 (subscription required)
"After the scandals [such as Enron and WorldCom], everyone focused on the audit committee...The comp committee is the next committee that the SEC and regulators are going to be scrutinizing.” Article quotes Professor David Larcker.

Next SEC target: Exec stock sales
Financial Week, October 1, 2007
SEC is focusing on abuses relating to SEC-sanctioned
trading plans at a key meeting on October 10, 2007 to be held in San Francisco. The key study suggesting possible trading abuses was published by Professor Alan Jagolinzer whose work has been a lightning rod for 10b5-1s.

November 2007

Insider trading and future earnings: How regulations impact insider buying and selling
Economist Intelligence Unit, September 17, 2007
(requires subscription)
Discusses research conducted by Professor Joseph D. Piotroski that indicates regulation of insider trading does impact insider behavior.

Doing lip service to the demands of corporate governance
New Zealand Herald, September 7, 2007
Discusses Professor Joy Ishii's dual-class firms study conducted with Wharton and Harvard Business School, which concludes that shares with voting rights in excess of economic rights are bad for other shareholders and that the bigger the gap the worse the damage.
(Abstract of working paper)

Beware the Corporate Raters  
Business 2.0 Magazine, September 1, 2007
Article by Business 2.0 magazine columnist Professor Jeffrey Pfeffer.

August 2007

Insider trading
International Financial Law Review, Aug 2007
Professor Alan Jagolinzer published a study that suggests that Rule 10b5-1 trading plans could be abused in a number of ways to facilitate trading based on inside information. The Enforcement Division of the Securities and Exchange Commission has indicated that it expects to focus closely on the use and operation of 10b5-1 plans. Rule 10b5-1 establishes that trading by an insider while they are aware of material non-public information will give rise to insider trading liability.

10b5-1 trading plans: The next big blowup?
Priya Cherian Huskins. Directors and Boards.
Philadelphia: 2007. Vol. 31, Iss. 4; pg. 59
(Subscription required)
Fallout? What Fallout? (Link to CFA MAgazine)
CFA Magazine, July/August 2007, Vol. 18, No. 4

More articles discussing Alan Jagolinzer's research on 10b5-1 trading plans.

July 2007

Now, It's Business By Data, but Numbers Still Can't Tell Future
The Wall Street Journal, July 23, 2007
Mentions Professors Jeffery Pfeffer and Bob Sutton's book, Hard Facts, Dangerous Half-Truths & Total Nonsense (HBS Press, 2006) and the role of management.

June 2007

Heard off the street: When is inside trading not inside trading?
Pittsburgh Post-Gazette, July 01, 2007
More coverage of Prof. Alan Jagolinzer's study on 10b5-1 trading plans and the potential legal implications.

Do SEC Rules on Insider Trading Really Protect?
Stanford Research, June 2007
Securities and Exchange Commission Rule 10b5-1,
designed to keep permitted insider trades from hurting others in the market, may not be achieving its goal, says Professor Alan Jagolinzer.

The Next Backdating Scandal?
CFO Magazine, June 22, 2007
Plans that automatically sell stocks, known as 10b5-1 plans, are supposed to protect executives from insider trading charges. But the SEC says it's taking a hard look at possible abuse. Professor Alan Jagolinzer's study on 10b5-1 trading plans is cited.

SEC Scrutiny of Stock Plans Could Spell Trouble
Texas Lawyer, June 4, 2007
Stanford study on 10b5-1 trading plans (conducted by Professor Alan Jagolinzer) is referenced in this article.

May 2007

Mutual Funds Vote Strategically in Board of Director Elections
Stanford Research, May 2007
By analyzing more than 3 million votes by 3,600 mutual funds, Professor Michael Ostrovsky has come to the conclusion that funds vote to protect themselves from negative reprisals. Some consistently approve slates of directors proposed by corporate management while the majority typically won’t say “no” unless they sense that a critical mass of other funds will do the same. [Details]

How Stanford Is Grooming Next Business Leaders
The Wall Street Journal, May 29, 2007
Evelyn Williams, director of the GSB's Center for Leadership Development and Research Leadership Laboratories, discusses the growing emphasis on leadership at Stanford.

April 2007

Even Costly Mergers Can Be Good for Some Stockholders
Stanford Research
It is widely known that after a public merger is announced the stock value of the acquiring company generally drops while that of the target firm goes up. Why, then, do so few buyer-side shareholders attempt to block mergers even in the face of such losses, particularly when millions or billions of dollars are at stake?

In a new study, Michael Ostrovsky, assistant professor of economics, has proposed an explanation. Top shareholders in acquiring companies often simultaneously own a near equal number of shares in target firms, which means that –– at the end of the day –– they usually break even.

Zell Wants to End Web's Free Ride
Washington Post, April 07, 2007
Zell talks business, Tribune buyout
The Stanford Daily, April 6, 2007
Sam Zell event sponsored by the Rock Center for Corporate Governance.

SEC Now Takes a Hard Look At Insiders' 'Regular' Sales
The Wall Street Journal,  April 4, 2007  (requires subscription).
Professor Jagolinzer's 10b5-1 trading plan research is cited.

March 2007

10b5-1 Trading Plans: The Next Stock Option Backdating Scandal?
Courtesy: Priya Cherian Huskins, "10b5-1 Trading Plans: The Next Stock Option Backdating Scandal?" Woodruff-Sawyer & Co. Client Briefing (March 2007) Click here for complete article [ PDF 293KB]

Could abuses of 10b5-1 trading plans become the next corporate governance scandal? New research from Stanford University School of Business Professor Alan Jagolinzer calls into question the legality of trades being made under certain 10b5-1 trading plans. Moreover, perhaps as a result of this research, Linda Chatman Thomsen, the head of enforcement at the Securities and Exchange Commission, noted in a speech on March 8, 2007 that the SEC is now looking into the issue. Considering that academic research precipitated the recent stock options back-dating scandal, a similar pattern may emerge with respect to Rule 10b5-1 trading plans. Accordingly, public companies should review their 10b5-1 trading plans in light of Professor Jagolinzer's research. To help you calibrate and address the risk, this paper first provides some background on 10b5-1 trading plans, then discusses Professor Jagolinzer's research, and finally offers recommendations for best practices related to 10b5-1 trading plans.

More Outside Directors Taking Lead in Crises
The Wall Street Journal, March 19, 2007 (requires subscription)
Article cites Professor Larcker on the blurring line between directors and managers.

The SEC Is Eyeing Insider Stock Sales
Business Week, March 19, 2007
Let Everyone Use What Wall Street Knows (subscription or fee may be required to access full article)
The New York Times, March 13, 2007, Op-Ed page
SEC probes possible abuse in exec trading plans
Reuters, March 8, 2007
Articles reference Professor Alan Jagolinzer's research on executive trading plans.

CNBC Highlights Stanford Directors' Forum, March 7, 2007 (view video clip)

February 2007

Why It Pays to Be Private
Tired of the hassles and demands, more and more U.S. companies are abandoning the public markets - and for good reason.
Business 2.0 Magazine, February 16, 2007
Article by Business 2.0 magazine columnist Professor Jeffrey Pfeffer.

IPOs still love U.S. markets
Fortune online, February 1, 2007
Cites Stanford University's Rock Center for Corporate Governance and the New York Stock Exchange seminar: "Can Our Capital Markets Be Saved and Do They Need Saving?" held January 30, 2007.

January 2007

Research firm hunts for clues in insider sales
Washington Post.com, January 27, 2007
Research conducted by Professor Alan Jagolinzer is cited.

Dictatorships Often Survive with Local Support
Stanford Research, January 2007
In a groundbreaking study, Gerard Padro i Miquel, assistant professor of political economy at the Graduate School of Business, demonstrated that African dictators distort their economies and steal foreign aid as the means to buy support from selected segments of the populace.

Hewitt Associates' Research Shows Impact That Pivotal Employees Have on Business Results
Hewitt Press Release, January 8, 2007
"This is the first business solution that uses predictive analytics to measure how pivotal employees impact business results and explain how human capital investments impact future Cash Flow Return on Investment..." states Professor David Larcker who is quoted in this article.

The high price of workplace mistrust
With rights to privacy and participation eroding, many employees are heading for the exits. When that happens, everybody loses.
Business 2.0 Magazine, January 5, 2007
Article by Business 2.0 magazine columnist Professor Jeffrey Pfeffer.

America's CEO pay may soon face squeeze
The Christian Science Monitor, January 4, 2007
New laws, a change in Congress, and investor pressure intensify the scrutiny on compensation. Professor David Larcker cited.

Securities fraud suits plunge
Stanford study finds class-action suits dropped 38 percent from 2005 to 2006; stepped-up enforcement seen as key
CNNMoney.com, January 2, 2007

 
December 2006

Insiders with a Curious Edge; How corporate executives seem to be violating the spirit, if not the letter, of a rule meant to prevent insider trading
BusinessWeek Online, December 7, 2006
Article cites research by Professor Alan Jagolinzer.

November 2006

Self-Deal? CEOs? Nahhh ...
Fortune, November 27, 2006
Article cites Professor Ron Kasznik's research on options.

Sleazy CEOs have even more options tricks
Fortune-CNN Money.com, November 14, 2006
Professor Ron Kasznik's research on options grants is discussed.

Business Wins Its Battle to Ease A Costly Sarbanes-Oxley Rule
The Wall Street Journal Online, November 10, 2006 (may requiresubscription)
Article quotes Joe Grundfest, co-director of the Rock Center for Corporate Governance at Stanford University.

A Closer Look At Trades By Top Brass
BusinessWeek, November 13, 2006
Discusses faculty member Alan Jagolinzer's research on trading within 10b5-1 plans which found that participants tend to outperform the market. (SEC Rule 10b5-1 allows officers, directors and other insiders of publicly traded companies to transact in their company shares at all times, not just during open trading windows.)

Where were the Auditors
Forbes.com, November 6, 2006
Professor Larcker quoted on the body of academic literature studying the pricing of options.

Not As Random As It Looks?
BusinessWeek, November 6, 2006
Discusses faculty member Alan Jagolinzer's research on trading within 10b5-1 plans.

Midway CEO Zucker's Safe Harbor
BusinessWeek Online, November 1, 2006
Cites Professor Alan Jagolinzer's research on 105b-1 plans discussed at the Lucky Strikes: Public Policy Issues in Backdating and Springloading conference sponsored by the Graduate School of Business-Corporate Governance Research Program and the Arthur and Toni Rembe Rock Center for Corporate Governance on October 30, 2006.

 
October 2006

Lucky Strikes: Public Policy Issues in Backdating and Springloading conference sponsored by the Graduate School of Business-Corporate Governance Research Program and the Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford University. Conference held in Washington, D.C. on October 30, 2006.

A conference that explored a broad range of important issues raised by the options backdating scandal. The Honorable Christopher Cox, Chairman of the Securities and Exchange Commission (SEC) offered opening remarks and Linda Chatman Thomsen, Director of the Division of Enforcement (SEC) addressed the session. Expert panels explored possible questionable practices surrounding options and 10b5-1 trading plans, policy issues surrounding the large number of issuers under investigation and emerging tax, accounting and insurance issues raised by backdating or misdating of options.

Conference Media:

video icon To view, download Apple QuickTimeTM For best audio and video quality, please use Apple QuickTimeTM. If after downloading you have problems, please contact webmaster@gsb.stanford.edu.

video icon Video File Conference Introduction and Welcome of SEC Chairman, The Honorable Christopher Cox (streaming video 150k)

video icon Video File Empirical Evidence Regarding Backdating, Springloading and other Potentially Problematic Trading Practices - Business School Professors David Larcker, Alan Jagolinzer and Ron Kasznik (streaming video 150k)

video icon Video File Remarks by Linda Chatman Thomsen, Director of the Division of Enforcement, Securities and Exchange Commission (streaming video 150k) Transcript of Linda Chatman Thomsen's speech from the SEC site.

video icon Video File The Springloading Debate (streaming video 150k)

video icon Video File Accounting and other Related Issues (streaming video 150k)

video icon Video File Litigation and Enforcement Policy Issues (streaming video 150k)

Chairman Rx: The Need For Perspective
Forbes.com, October 27, 2006, Commentary by Saj-nicole Joni.
Professor Robert Daines is quoted on HP's board of directors and group-think.

Options Backdating: Walking the Plank
The Economist Print Edition, October 24, 2006,
Discusses study by Professor Alan Jagolinzer that has found that executives trading under SEC rule 10b5-1, which is designed to ensure they do not take advantage of insider information, has generated suspiciously high returns.

Sending the Board Back to School
BusinessWeek, October 22, 2006
Discusses the Stanford Directors' Forum, a corporate governance course offered at the Stanford Graduate School of Business, and quotes Professor Maureen McNichols, director of the Forum.

A Healthy Boardroom Is United and Focused On Lending a Hand
The Wall Street Journal, October 23, 2006 (requires subscription)
Article quotes David F. Larcker, co-director of the Rock Center for Corporate Governance at Stanford

September 2006

HP spying scandal back in the spotlight
Financial Times, London (UK), September 28, 2006,
Observations on the HP board spying scandal. Article quotes Professor David F. Larcker.

Study: Nation's Power Elite Thrive on Risk
San Mateo County Times, September 24, 2006 (available via archive search)
Power tied to risky behavior, study says. Business leaders often blinded by their optimism. Article quotes Professor David F. Larcker.

Has HP done enough in corporate governance?
CNET News.com, September 22, 2006
Legal experts give the Silicon Valley giant a thumbs-up for swiftly moving to clean up the mess, but say it must do more. Article quotes Robert Daines, co-director of the Rock Center for Corporate Governance at Stanford.

Long & Short: Steve Jobs Should Address Options Scandals
The Wall Street Journal, September 6, 2006 (subscription or fee required to access full article)
Article quotes faculty member David F. Larcker on personal and economic responsibility of executives.

August 2006

Professor David F. Larckers' interview on Valuations of Options conducted with the Center for Financial Research and Analysis on August 9, 2006. Click here to download and listen to the complete 38 minute call. CFRA is the independent global leader in forensic accounting research and due-diligence services for the institutional investment, financial services, insurance, corporate, legal, and regulatory communities. For more information, visit www.cfraonline.com

'Good' governance doesn't cap CEO pay rises-study
Reuters News, August 15, 2006
Article cites research conducted by Professor Charles O'Reilly.

 
July 2006

Unhappy Valley: why a high-tech hub is accused of taking the easy option
Financial Times, July 28, 2006 (Comment and Analysis)
"If companies had money to spend, they were spending it on innovation," explains David Larcker, a professor at Stanford's Graduate School of Business. "They were spending a minimum on compliance and ticking the boxes."

Disclosure Adds Shareholder Value: Lessons from Sarbanes-Oxley's Predecessor
July 2006
To understand whether shareholders value government regulation in financial markets, Professors Paul Oyer, Michael Greenstone, and Annette Vissing-Jorgensen completed an analysis of the effects of the 1964 Securities Acts Amendments.

Scrutiny of executive windfalls intensifies
The Christian Science Monitor, July 19, 2006
Backdating stock options to fatten CEO pay may have been surprisingly widespread. Article quotes Professor David F. Larcker.

May 2006

Trading Rule May Contain Loophole for CEOs
Los Angeles Times, May 30, 2006 (subscription or fee required to access full article)
Cites research of Alan Jagolinzer, assistant professor of accounting at GSB.

Stock options worries cast shadow over Silicon Valley
Financial Times, London (UK), May 25, 2006 (may require subscription)
Cites Professor David F. Larcker who discusses under-investment in governance controls by start-ups.

Tracking the Numbers -- Street Sleuth -- Filing Footnote: This Insider Sale Helps Hedge Bets
The Wall Street Journal, May 15, 2006 (subscription or fee required to access full article)
Cites Professor Alan Jagolinzer and two co-authors study that looked at forward sales at 100 companies between 1996 and 2004.

April 2006

Exposing CEO Pay
Fortune Magazine/CNN Money.com, April 7, 2006
Comments from the SEC Chairman Chris Cox speaking at The Rock Center for Corporate Governance at Stanford University conference held in Washington, D.C. on April 3, 2006.

February 2006

Excessive Executive Pay Makes Headlines, But So What?
February 2006
The business press loves to expose stories of excessive executive compensation. Professor David Larcker says the media may single out egregious cases, but the unflattering publicity doesn't seem to make any difference in how firms pay those top executives.