In March 2013, Lululemon Athletica removed its inventory of women's black yoga pants from its stores because recent shipments of the product were “too sheer.” For a company reliant on a reputation for quality, the news was devastating. Worse, the recall set off a series of PR related...

This Closer Look illustrates the relation between executive compensation and organizational risk through the context of the financial crisis of 2008. We demonstrate that the incentives that bankers had to increase firm risk not only increased but increased substantially in the years preceding...

The shareholders of public corporations have considerable interest in the choice of individual to serve as CEO of their company. They want to be assured that the company has a viable plan in place to replace the current CEO if necessary. Historically, boards have deferred to outgoing CEO,...

Union pension funds manage approximately $3.5 trillion in retirement assets on behalf of public and private sector employees covered by collective bargaining agreement. They are also very active in the proxy process, sponsoring approximately one-third of the shareholder proposals that are...

Corporate monitors are important participants in corporate governance systems. Monitors include the board of directors, the general counsel, and internal and external auditors. Monitors are paid by the organization but their responsibilities largely or mostly non-managerial.How should monitors...

It is very difficult for shareholders to know detailed information about CEO succession planning among the companies they have invested in. Although CEO deaths are rare, the sudden death of a CEO can provide insight into the quality of succession planning and governance of a company. Whereas...

The topic of executive compensation elicits strong emotions among corporate stakeholders and practitioners. On the one hand are those who believe that chief executive officers in the United States are overpaid. On the other hand are those who believe that CEOs are simply paid the going...

The press and other third-party observers frequently discuss executive compensation. However, executive compensation figures are not always what they seem. Executive pay packages contain a diverse mix of cash and non-cash incentives, payable in one or multiple years and subject to accruals,...

The board of directors has a long list of responsibilities in all areas of governance. However, to many, the fundamental obligations of the board are simple and distill down to two: 1) evaluate and approve the corporate strategy and 2) hire and fire the CEO. The Hewlett-Packard Company has had...