We argue that a fundamental reason for the short term perspective of corporate executives is the short-term orientation of shareholders and financial markets that drive the performance benchmarks of CEOs. In our view, long-term committed shareholders can provide substantial benefits to the...

While the unfolding financial turmoil has involved new elements, more fundamental elements have remained the same. New elements include structured credit, the originate-to-distribute business model and the tri-party repurchase agreement. The recurrence of crises reflects a basic procyclicality...

The information produced by sophisticated investors in the stock market may be useful for uninformed depositors. Since much information is not produced for Shinkin banks (cooperatives) in Japan, relying on the information from the stock market may be an efficient decision for these depositors....

I investigate whether or not the multi-period trades of financial institutions cause mispricing in the stock market. After controlling for the magnitude and trends in institutional trades, I find evidence consistent with institutional trades pushing prices away from fundamentals. Stocks heavily...

The effectiveness of shareholder voting as a governance mechanism depends in large part on the voting behavior of institutional investors, many of whom receive recommendations on how to vote from proxy advisors such as ISS. Company managers and policymakers are increasingly concerned that...

This paper examines local bias in the context of venture capital (VC) investments. Based on a sample of US VC investments between 1980 and June 2009, we find more reputable VCs (older, larger, more experienced, and with stronger IPO track record) and VCs with broader networks exhibit less local...

This article examines, on the fifth anniversary of the landmark UK Stewardship Code, the notable achievements and continuing challenges in the drive to encourage institutional investors to be informed and engaged owners.The key messages are:1. Getting institutional investors to be good owners...

This paper shows how network theory can improve our understanding of institutional investors' voting behavior and, more generally, their role in corporate governance. The standard idea is that institutional investors compete against each other on relative performance and hence might not cast...

The transition to a sustainable economy currently involves a fundamental transformation of our capital markets. Lawmakers, in an attempt to overcome this challenge, frequently seek to prescribe and regulate how firms may address environmental, social, and governance (ESG) concerns by formulating...

Debtholder stewardship refers to the involvement of corporate creditors in a firm’s governance framework with the aim of improving corporate decision-making. This article develops the theory of debtholder stewardship by identifying the mechanisms of debtholder influence, assessing their...