This paper re-examines the relation between firm value and board structure. We find that complex firms, which have greater advising requirements than simple firms, have larger boards with more outside directors. The relation between Tobin's Q and board size is U-shaped which, at face value,...

This paper provides empirical evidence of a strong causal relation between the structure of managerial compensation and investment policy, debt policy, and firm risk. Controlling for CEO pay-performance sensitivity (delta) and the feedback effects of firm policy and risk on the structure of the...

We address two aspects of board dynamics — group-think and teamwork — that both arise from increased director overlap. Overlap captures the extent of common service by board directors. Greater overlap can lead to excessive cohesiveness of the group and thus group-think, where the desire for...

We investigate market behavior in a setting where managerial incentives to manipulate earnings and market price should be apparent ex ante to market participants. We find evidence of abnormally low discretionary accruals in the period following announcements of cancellations of executive stock...

Prior theoretical work on estimation risk generally has been restricted to single-period, returns-based models in which the investor must estimate the vector of expected returns but the covariance matrix is known. This paper extends the literature on parameter uncertainty in several ways. First,...

This paper presents some preliminary results on predicting corporate bankruptcy using a generalized qualitative response model. The results suggest that these models may provide some improvement in forecasting as compared to a Logit model

This paper analyzes lawsuits in which at least one side, plaintiff or defendant, is a corporation. In particular, we provide evidence on the relative frequency of the legal issues involved, the incidence of suits by whether the opponent is another firm, governmental entity, or non- corporate...

Panel OLS and GMM-IV estimates indicate that executives respond to the adoption of a compensation clawback provision by decreasing firm risk. The mechanisms that transmit incentives to decisions and decisions to risk appear to be more conservative investment and financial policies and preemptive...