Research by the Corporate Governance Research Initiative

The hallmark of good corporate governance is an independent board of directors to oversee management. However, it is not clear that independent directors receive the information they need to make fully informed decisions on all key matters.…

Proxy advisory firms have significant influence over the voting decisions of institutional investors and the governance choices of publicly traded companies. However, it is not clear that the recommendations of these firms are correct and…

In this Closer Look, we examine the roles that leadership and culture play in contributing to chronic misbehavior and the manner in which it takes root in an organization. We use the example of Uber Technologies. Between 2012 and 2017, Uber…

The board of directors is expected to ensure that management has identified and developed processes to mitigate risks facing the organization, including risks arising from data theft and the loss of information. Unfortunately, recent experience…

This Research Spotlight provides a summary of the academic literature on shareholder activism, including:

• The impact of union activism on corporate outcomes.
• The performance of socially responsible investment funds.
…

Board members rely on information provided by management to inform their decisions. Unfortunately, some research calls into question the adequacy of the information the board members receive and, by extension, the quality of decisions they are…

In the summer of 2017, Stanford Graduate School of Business and The Rock Center for Corporate Governance surveyed 113 directors of Fortune 250 companies and 18 prominent executive recruiters and compensation consultants that advise these…

Governance experts have vigorously debated the appropriateness of CEO compensation. And yet, very little effort has been made to understand the size, quality, and efficiency of the labor market for CEO talent, which is a key determinant of pay.…

This Research Spotlight provides a summary of the academic literature on the role of proxy advisors in the proxy voting process:

This Research Spotlight expands upon issues introduced in the Quick Guide “…

CEO succession at many companies occurs in a black box. Shareholders are not privy to boardroom discussions prior to the announcement of a CEO departure, and press releases announcing the change contain boilerplate language that does not make it…

Understanding CEO compensation plans is a continuing challenge for directors and investors. The disclosure of these plans is dictated by SEC rules that rely heavily on the “fair value” of awards at the time they are granted. The problem with…

This Research Spotlight provides a summary of the academic literature on the impact of equity ownership on firm performance and agency problems:

• The relation between equity ownership and performance
• The relation between…

The boards of all publicly traded companies are required to conduct a self-evaluation at least annually to determine whether they are functioning effectively. Research suggests that while many directors are satisfied with the job that they and…

This Research Spotlight provides a summary of the academic literature on CEO pay levels in the United States. It reviews the evidence of:

• Long-term trends in the CEO compensation
• The relation between CEO compensation and…

Many observers consider the most important responsibility of the board of directors its responsibility to hire and fire the CEO. To this end, an interesting situation arises when a CEO resigns and the board chooses neither an internal nor…

In summer 2016, the Rock Center for Corporate Governance at Stanford University conducted a nationwide survey of 1,…

In the summer of 2016, the Rock Center for Corporate Governance at Stanford University along with…

This Research Spotlight provides a summary of the academic literature on internal and external CEOs. It reviews the evidence of:

• Trends in hiring external CEOs
• Operating condition of companies that hire internal and external…

Shareholders pay considerable attention to the choice of executive selected as the new CEO whenever a change in leadership takes place. However, without an inside look at the leading candidates to assume the CEO role, it is difficult for…

This Research Spotlight provides a summary of the academic literature on the influence that CEOs have on company outcomes (performance and risk). It reviews the evidence of:

• The contribution of the CEO to overall company performance…

This Research Spotlight provides a summary of the academic literature on relation between CEO performance and turnover. It reviews the evidence of:

• The relation between performance and likelihood of termination
• The relation…

This paper examines the relation between political connections and informed trading by corporate insiders in the context of the Financial Crisis. The unprecedented magnitude of government intervention, the substantial impact of this intervention…

Executive compensation is a highly controversial topic. Journalists, governance commentators, and members of the American public believe that the majority of CEOs are overpaid. Missing from the discussion, however, is the viewpoint of the…

Individual investors are active participants in the shareholder resolution process, filing approximately one quarter of the total number of shareholder resolutions voted on each year. Their activism, however, is controversial. Critics contend…