This paper proposes a theoretical model that incorporates corporate governance into the basic CAPM, where corporate governance affects the disutility of managerial effort and the possibility of managers to divert company resources. It shows that corporate governance affects firms’ stock...

Investor confidence in financial markets depends in large part on the existence of an accurate disclosure and reporting regime that provides transparency in the beneficial ownership and control structures of publicly listed companies. Today, a common post-financial crisis regulatory reform theme...