Research by the Corporate Governance Research Initiative

This Research Spotlight provides a summary of the academic literature on how equity compensation influences CEO risk taking. It reviews the evidence of:

• The relation between stock options and CEO investment decisions
• The…

This Research Spotlight provides a summary of the academic literature on how golden parachute payments influence CEO incentives to pursue mergers and acquisitions. It reviews the evidence of:

• Shareholder reaction to the…

Corporate governance experts pay considerable attention to the composition of the full board of directors. And yet, much of the substantive work of the board is carried out by committee.

While the nominating and governance committee, in…

The shareholders of public corporations have considerable interest in the choice of individual to serve as CEO of their company. They want to be assured that the company has a viable plan in place to replace the current CEO if necessary.

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This Closer Look illustrates the relation between executive compensation and organizational risk through the context of the financial crisis of 2008. We demonstrate that the incentives that bankers had to increase firm risk not only increased but…

Corporations dedicate significant time to managing their shareholder base. Does the composition of a company’s shareholder base really impact corporate decision making and stock-market value?

In March 2013, LululemonAthletica removed its inventory of women’s black yoga pants from its stores because recent shipments of the product were “too sheer.”

For a company reliant on a reputation for…

This study found that nearly all companies describe their ideal shareholder as having a long-term investment horizon, but that about half of companies’ shareholder base has a short- or medium-term horizon. As a result, the authors find,…

Performance appraisal is one of the cornerstones of management control systems. Although this topic has been the subject of considerable prior research, most of this work is based on a single observation per firm or performance appraisal…

On March 5, biotechnology company Chimerix refused to provide a potentially life-saving drug to 7-year old Josh Hardy who was battling cancer. The drug had not yet received FDA approval, and the company had discontinued its “…

A study by Stanford, the Institute of Executive Development, and The Conference Board reveals a critical stumbling block in the…

Berkshire Hathaway Vice Chairman Charlie Munger is well known as the partner of CEO Warren Buffett and also for his advocacy of “multi-disciplinary thinking” — the application of fundamental concepts from across various academic disciplines to…

Many believe that the selection of the CEO is the most important decision that a board can make. Why aren’t more companies prepared for a change at the top?

This CEO succession study shows shortfalls in C-suite talent development and succession planning.

Rumors and speculation abound when it comes to discussions about CEO succession at high-profile companies such as Ford, Proctor…

This study examines the effects of shareholder support for equity compensation plans on subsequent CEO compensation. Using cross-sectional regression, instrumental variable, and regression discontinuity research designs, we find little evidence…

This paper examines the economic consequences associated with the board of director’s choice of whether to adhere to proxy advisory firm policies in the design of stock option repricing programs. Proxy advisors provide research and voting…

There are at least three potential ways in which a CEO divorce might impact a corporation and its shareholders:

1. It might reduce the executive’s control or influence over the organization.
2. It might affect his or her…

Proxy advisory firms have long been known to influence the voting decisions of institutional investors. Now, a growing body of evidence suggests that they also influence company decisions in equity plan design. Should shareholders and the SEC be…

We examine the biographies and professional experiences of the female directors of Fortune 250 companies. How have pathways for women changed? Are the opportunities and obstacles today the same or different?

Nearly two-thirds of CEOs do not receive outside leadership advice, but nearly all want it. “Lonely at the top” resonates for most CEOs.

“It’s lonely at the top” appears to be truer than ever, according to a new study conducted by the…

Prior research argues that a manager whose wealth is more sensitive to changes in the firm’s stock price has a greater incentive to misreport. However, if the manager is risk-averse and misreporting increases both equity values and equity risk,…

High-trust organizations are characterized by lower bureaucracy, simpler procedures, and higher productivity. Would shareholders be better off if companies had fewer controls and instead spent more time fostering trust?

A study conducted by the Center for Leadership Development and Research at Stanford Graduate School of Business, Stanford University’s Rock Center for Corporate Governance, and The Miles Group reveals that boardrooms are giving poor grades to…