Boards of directors face the twin task of disciplining and screening executives. To perform these tasks directors do not have detailed information about executives' behaviour, and only infrequently have information about the success or failure of initiated strategies, reorganizations, mergers...

This paper outlines the foundations of corporate governance. The discussion includes a review on the modern corporation, transaction costs theory, agency costs theory, legal investor protection, investor protection by corporate governance and its various mechanisms, as well as an overview of the...

This study examines the impact of shareholder rights on the wealth effects of privately negotiated stock repurchases. Our results show that wealth gains are lower when shareholder rights are more suppressed. We also find that the premium paid for shares is inversely related to the strength of...

This paper investigates how managerial expertise — specifically, industry expertise — affects firm value through divestiture. Using CEOs' managerial experiences in industries throughout their careers as a measure of their industry expertise, I find that CEOs in diversified conglomerates are...

This paper analyzes the effect of corporate governance on the payout policy when a firm has both agency problems and external financing constraints. We empirically test whether strong corporate governance would lead to higher payout to minimize agency problems (outcome hypothesis), or to lower...

Corporate governance is a multidimensional construct, with many interactive mechanisms that must be simultaneously managed for efficiency. We develop a model where multiple governance mechanisms (board independence, board expertise, and CEO equity incentives) are endogenously selected to...

This paper uses Taiwanese data to examine the impact of firm-level corporate governance mechanisms on firms' average cash holdings. Specifically, it examines how a firm's number of banking relationships and the percentages of managerial ownership and board ownership impact the firm's level of...

I find that corporate boards frequently link CEO compensation to subjective performance measures that are neither accounting ratios nor stock returns. Subjective measurement incorporates soft information privately observed by the board about the CEO's contribution to long-term firm value. I show...

This paper shows outside directors have an increased chance of obtaining new positions (CEO, COB, directorships) during a CEO turnover year in firms that hire a CEO externally. The new positions are determined by outside directors' CEO hiring source choice (internal or external), not their...

Evaluating agency theory and optimal contracting theory of corporate philanthropy, we find that as giving increases, shareholders reduce their valuation of cash holdings. Dividend increases following the 2003 Tax Reform Act are also associated with reduced corporate giving. Using a natural...