Research by the Corporate Governance Research Initiative

Based on two samples of high quality personality data for chief executive officers (CEOs), we use linguistic features extracted from conferences calls and statistical learning techniques to develop a measure of CEO personality in terms of the Big…

One of the most controversial issues in corporate governance is whether the CEO of a corporation should also serve as chairman of the board. In theory, an independent board chair improves the ability of the board to oversee management. However,…

The board of directors has a responsibility to investigate credible allegations that management has engaged in activity that is not in the interest of the company or its shareholders. In the case of illegal activity, the appropriate response is…

This paper examines the approaches accounting researchers adopt to draw causal inferences using observational (or nonexperimental) data. The vast majority of accounting research papers draw causal inferences notwithstanding the well-known…

Institutional investors pay considerable attention to the quality of a company’s governance. Unfortunately, it is difficult for outside observers to reliably gauge governance quality. Oftentimes, poor governance manifests itself only after…

The litmus test for an effective compensation program is whether it provides “pay for performance.” While the concept of pay for performance is simple, its implementation is not. In particular, boards must consider not only whether a compensation…

This Research Spotlight provides a summary of the research literature on whether companies with diverse boards (in terms of background, gender, or ethnicity) exhibit better performance and governance quality than companies without diverse boards…

Keller Williams is one of the most successful real estate franchises in the world. The leaders of the company attribute its growth in large part to a cultural model that emphasizes profit sharing, interdependence, and success through the efforts…

CEO compensation is a highly controversial subject. While most company directors believe that CEO pay is not a problem, the majority of the American public believes that it is. The difficulties that boards face in justifying CEO pay levels in…

Recently, the Rock Center for Corporate Governance at Stanford University conducted a nationwide survey of 1,202 individuals — representative by gender, race, age, political affiliation, household income, and state residence — to understand…

Recently, Heidrick & Struggles and the Rock Center for…

This Research Spotlight provides a summary of the academic literature on how shareholder voting on executive compensation plans influences executive pay. It reviews the evidence of:

• The impact of “vote no” campaigns
• The…

Corporate governance experts pay considerable attention to issues involving the board of directors. Because of the scope of the board’s role and the vast responsibilities that come with directorship, companies are expected to adhere to common…

For much of its history, Berkshire Hathaway has been regarded primarily as the investment vehicle of Warren Buffett rather than a bona fide corporation. However, as Berkshire Hathaway has expanded beyond its core insurance operations, more…

This Research Spotlight provides a summary of the academic literature on how staggered boards impact shareholder value by insulating management from the pressures of capital markets. It reviews the evidence of:

• Staggered board…

We examine the link between corporate governance, managerial incentives, and corporate tax avoidance. Similar to other investment opportunities that involve risky expected cash flows, unresolved agency problems may lead managers to engage in more…

In recent years, companies have begun to voluntarily disclose alternative measures of CEO compensation. These figures differ — sometimes significantly — from those reported in the summary compensation tables of the annual proxy. The motivation to…

In fall 2014, the Stanford Graduate School of Business, in collaboration with BoardSource and GuideStar, surveyed 924 directors of nonprofit organizations about the composition, structure, and practices of their boards.

The skills,…

Corporate leaders pay considerable attention to the strategy and finances of their organizations but often less attention to organizational features that impact whether their strategy is successful, including the decision-making structure and the…

For-profit and nonprofit organizations exist for different reasons: for-profits to generate a return on investment for shareholders, and nonprofits to pursue charitable and social activities unrelated to commerce. The obligations of the boards of…

In the fall of 2014, RR Donnelley, Equilar, and the Rock Center for Corporate Governance at Stanford University surveyed 64 asset managers and owners with a combined $17 trillion in assets to understand how institutional investors use the…

This paper examines the economic consequences of institutional investors outsourcing research and voting decisions in public company elections to proxy advisory firms. We investigate the implications of these decisions in the context of…

Institutional investors are highly dissatisfied with the quality of information that they receive about corporate governance policies and practices in the annual proxy. Across the board, they want proxies to be shorter, more concise, more candid…