Research by the Corporate Governance Research Initiative

The trend to incorporate Environmental, Social, and Governance (ESG) matters into corporate boardrooms and capital markets is pervasive. Nevertheless, considerable uncertainty exists over what ESG is, how it should be implemented, and its…

The role that a CEO’s personality plays in corporate outcomes is a topic of considerable interest, particularly the relation between narcissistic CEOs and performance. Common perception is that CEO narcissism is highly prevalent, and considerable…

In this Closer Look, we examine the General Counsel perspective of Environmental, Social, and Governance matters. General Counsel offer an interesting perspective because they are charged with advising boards and companies on operating between…

In this Closer Look, we examine a new industry that has arisen in recent years to facilitate the financing of stock-option exercises for employees and executives of pre-IPO companies. These capital providers allow individuals to exercise and…

In 2020, the Securities and Exchange Commission revised human capital disclosure rules to improve shareholder understanding of how human capital management contributes to corporate value and strategy. In this Closer Look, we examine early…

We study the role of financial flexibility on COVID-19 employment actions. Using daily data from March through May 2020 for 354 of the largest U.S. employers, we find that firms facing a negative demand shock were 28.8 percentage points more…

Recent years have witnessed a growing trend of stakeholder issues becoming prominent in discussions of corporate governance. One source of this pressure comes from an unexpected constituent: the company’s own employee base. In this Closer Look,…

The SEC adopted Rule 10b5-1 to provide an affirmative defense against allegations of insider trading to executives whose jobs regularly expose them to material nonpublic information. In this Closer Look, we present evidence on the trading…

Environmental costs are a legal obligation of companies and proper corporate governance requires that they be dealt with responsibly. Unfortunately, disturbing examples exist where companies have taken aggressive action to separate their…

Other organizational structures exist besides public corporations. Examples include family-controlled businesses, venture-backed companies, private equity-owned businesses, and nonprofit organizations. Each of these faces their own issues…

Scrutiny of CEO pay increases during times of economic stress, when it is not clear how much pay CEOs should receive when corporate profitability suffers due to an unforeseen decline in the operating environment. On the one hand, the board might…

We analyze the trading of corporate insiders at leading financial institutions during the 2007 to 2009 financial crisis. We find strong evidence of a relation between political connections and informed trading during the period in which Troubled…

Our concept of risk continues to broaden and now includes instances in which representatives of a company make statements, actions, or decisions that damage the firm by inviting public scrutiny, sparking a reaction among customers, employees,…

Investors rely on corporate disclosure to make informed decisions about the value of companies they invest in. The COVID-19 pandemic provides a unique opportunity to examine disclosure practices of companies relative to peers in real time about a…

This Research Spotlight provides a summary of the academic literature on board composition, quality, and turnover. It reviews the evidence of:

• The appointment of outside CEOs as directors
• The importance of industry expertise…

There has been a broad push in recent years to increase diversity at the board and CEO levels of public corporations. Despite this effort, diversity on boards and in senior leadership positions has not reached the levels to which advocates aspire…

Little is known about the process by which pre-IPO companies select independent, outside board members — directors unaffiliated with the company or its investors. Private companies are not required to disclose their selection criteria or process…

Corporate executives receive a considerable portion of their compensation in the form of equity and, from time to time, sell a portion of their holdings in the open market. Executives nearly always have access to nonpublic information about the…

A company offer a competitive compensation arrangement in order to attract, retain, and motivate a qualified CEO to manage the organization.

This quick guide examines the elements of executive compensation and the process by which the…

The board of directors is responsible for ensuring that correct management is in place to run the organization. This includes hiring, evaluating, and — when circumstances merit — removing or replacing the chief executive officer.

This…

There has been tremendous pressure on companies to satisfy stakeholder considerations as part of their long-term planning and governance. This activity is broadly categorized as ESG (environmental, social, and governance). 

This Quick…

A company offers equity incentives to encourage CEOs to take actions that are in the interest of shareholders. At the same time, equity incentives have the potential to encourage undesirable behaviors.

This Quick Guide examines the effects…

The board of directors is responsible for ensuring the integrity of published financial statements. This includes working with management to set the parameters for accounting quality and internal controls, and retaining an external auditor to…