Labor has a large contractual claim on a firm's cash flow. Labor equity ownership gives employees both a fractional stake in the firm's residual cash flows and a voice in corporate governance. Relative to otherwise similar firms, labor-controlled publicly traded firms invest less, take fewer...

This paper presents evidence on how directors who are active CEOs of other firms affect firm behavior and board effectiveness. I show that shareholders incur significant costs when other CEOs serve on the board. CEOs are paid more and their compensation is less sensitive to firm performance....

We study the effect of labor-friendly corporate practices on shareholder outcomes using firms selected by Fortune magazine as the quot;Best 100 Companies to Work for in Americaquot; over 1998-2004. We find that investors react positively to the list's announcement and that list firms...

This paper examines the relation between a board's size and its monitoring effectiveness by exploring how board size affects different aspects of the CEO replacement process. I find that the probability of CEO turnover is significantly negatively related to board size, and that the abnormal...

Recent corporate scandals have led to renewed campaigns for governance reforms, including calls for the separation of CEO and chairman positions. This paper cautions that the push toward a common corporate leadership structure may be detrimental if differences in individual organizational...

It is often suggested that the takeover market is appropriate for containing the agency problems of excessive corporate liquidity. However, recent work shows that this is not the case. This paper focuses on the takeover-deterrence effects of corporate liquidity and suggests the proxy contest as...

We conceptualize mergers as one of several strategies for creating value and study merger performance by evaluating the performance of firms employing an acquisitive strategy. Relative to other firms, acquisitive firms are valued lower, innovate less, and exhibit lower employee and total factor...

Collaborative partnerships create interfirm linkages that potentially tie the fortunes of partnering firms to changing circumstances and decisions of each other. Yet not much is known about how firms in such partnerships are affected by their partners' post-formation decisions outside of...

As shown in previous studies, founder-led firms perform better than those run by professional managers. Does this reflect the special relation of founders to their firms or do entrepreneurs possess attributes and experiences that are valuable even at firms not founded by them? Drawing on the...

We study the effect of bank governance on risk-taking in commercial lending. Banks with more effective boards are less likely to lend to riskier borrowers. This effect is restricted to periods of distress in the banking industry. Banks with more effective boards are less likely to lend to...