Currently, a director is classified as independent if he/she has neither financial nor familial ties to the CEO or to the firm. We add another dimension: social ties. Using a unique data set, we find that 87% of boards are conventionally independent, but that only 62% are conventionally and...

We examine the impact of cultural diversity in corporate boards on a firm's corporate social performance. Using a novel approach to identify a director's cultural roots based on ancestry, we estimate the degree of cultural diversity at the board level. We find that board cultural diversity is...

CEOs are insured that they will not be terminated frivolously when they expect to be given severance because it becomes expensive for the board to terminate the CEO. Because severance makes termination initially costly, CEOs can create barriers to internal governance by making it even more...

We use the practice of employee option repricing to investigate how shareholder involvement in firm compensation policies affects the quality of firm governance. We find that a 2003 reform that empowered shareholders to approve or reject repricing proposals led to value increases in previous...

Recent trends in shareholder empowerment have spurred a heated debate whether empowered shareholders will ultimately cure corporate ills or adversely affect corporate fortunes. While some scholars claim that further strides in empowering shareholders will improve managerial accountability and...

In this paper, we empirically test the impact of industry concentration on corporate investment. Using both traditional proxies and recently developed text-based measures of industry concentration, we show that firms operating in competitive industries invest significantly more in both physical...

Corruption is an epidemic in Kenya. Major corruption scandals have been reported since the early 90's. These include the Turkwel Hydroelectric Power Station scandal (1986-1990), the Goldenberg scandal (1990-1999), the Grand Regency scandal in 2008, and the Triton Oil scandal in 2009 among...

A reliable system of corporate governance is considered to be an important requirement for the long-term success of a company. Unfortunately, after decades of research, we still do not have a clear understanding of the factors that make a governance system effective. Our understanding of...

Most directors and senior managers of UK companies would likely regard it as trite law that, in undertaking their managerial and/or control functions, they are accountable first and foremost to their employer firm's general body of shareholders. It follows that the interests of other corporate...

This symposium paper critically evaluates the developing 'Post-Shareholder-Value' ('PSV') paradigm in corporate governance scholarship and practice, with particular reference to Professor Colin Mayer's influential theory of the corporation as a unique long-term "commitment device". The paper's...