Research by the Corporate Governance Research Initiative

Recently, there has been debate among corporate managers, board of directors, and institutional investors around how best to incorporate ESG (environmental, social, and governance) factors into strategic and investment decision-making processes.…

This Research Spotlight provides a summary of the academic literature on how dual-class share structures influence firm value and corporate governance quality. It reviews the evidence of:

• The relation between dual-class shares and…

We examine the long-term effects of interventions by activist hedge funds. Research documents positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that activism…

This study investigates whether investors are willing to trade-off wealth for societal benefits. We take advantage of unique institutional features of the municipal securities market to provide insight into this question. Since 2013, over $23…

We examine the selection of peer groups that boards of directors use when setting the level of CEO compensation. This choice is controversial because it is difficult to ascertain whether peer groups are selected to (i) attract and retain top…

Two decades ago, McKinsey advanced the idea that large U.S. companies are engaged in a “war for talent” and that to remain competitive they need to make a strategic effort to attract, retain, and develop the highest-performing executives. To…

We construct a novel measure of disclosure choice by firms. Our measure uses linguistic analysis of conference calls to flag a manager’s response as providing an explicit “non-answer” to an analyst’s question. Using our measure, about 11% of…

This Data Spotlight provides data and statistics on shareholder activism and the market for corporate control. This data supplements the issues introduced in the Quick Guides “The…

In this Closer Look, we examine the tensions between corporate culture, financial incentives, and employee conduct as illustrated by the Wells Fargo cross-selling scandal. In 2016, Wells Fargo admitted that employees had opened as many as 2…

This Data Spotlight provides data and statistics on the venture capital industry and the governance of pre-IPO companies in the United States. This data supplements the issues introduced in the Quick Guide “…

Companies are required to have a reliable system of corporate governance in place at the time of IPO in order to protect the interests of public company investors and stakeholders. Yet, relatively little is known about the process by which they…

CEO activism — the practice of CEOs taking public positions on environmental, social, and political issues not directly related to their business — has become a hotly debated topic in corporate governance. To better understand the implications of…

In summer and fall 2018, the Rock Center for Corporate Governance at Stanford University surveyed 53 founders and CEOs of 47 companies that completed an Initial Public Offering in the U.S. between 2010 and 2018 to understand how corporate…

We examine the long-term effects of interventions by activist hedge funds. Prior papers document positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that…

In summer and fall 2018, the Rock Center for Corporate Governance at Stanford University conducted a nationwide survey of 3,544 individuals — representative by gender, race, age, household income, and state residence — to understand how the…

This Data Spotlight provides data and statistics on the attributes of boards of directors of publicly traded companies in the United States. This data supplements the issues introduced in the Quick Guide “…

Companies in the United States are staying private longer, and this trend has important implications for companies and their employees. Employees holding equity awards in private companies are restricted from monetizing an illiquid asset that…

This Data Spotlight provides data and statistics on unethical behavior in corporations and other negative outcomes including bankruptcy, litigation, and corruption in the United States. This data supplements in the issues introduced in the Quick…

The hallmark of good corporate governance is an independent board of directors to oversee management. However, it is not clear that independent directors receive the information they need to make fully informed decisions on all key matters.…

Proxy advisory firms have significant influence over the voting decisions of institutional investors and the governance choices of publicly traded companies. However, it is not clear that the recommendations of these firms are correct and…

In this Closer Look, we examine the roles that leadership and culture play in contributing to chronic misbehavior and the manner in which it takes root in an organization. We use the example of Uber Technologies. Between 2012 and 2017, Uber…

The board of directors is expected to ensure that management has identified and developed processes to mitigate risks facing the organization, including risks arising from data theft and the loss of information. Unfortunately, recent experience…

This Research Spotlight provides a summary of the academic literature on shareholder activism, including:

• The impact of union activism on corporate outcomes.
• The performance of socially responsible investment funds.
• …

Board members rely on information provided by management to inform their decisions. Unfortunately, some research calls into question the adequacy of the information the board members receive and, by extension, the quality of decisions they are…