New Paper: Asset Management, Index Funds, and Theories of Corporate Control

Matthew J. Mallow’s new paper on index funds: This paper seeks to ground the debate around asset managers, index funds and corporate control firmly in the practical context of the operation and regulation of asset managers. Acting on be- half of clients, asset managers are incentivized to monitor companies for long-term performance. As minority shareholders,…

Larker and Tayan Re-Discover the Governance Wheel

Stanford’s David F. Larcker and Brian Tayan have a new paper called Loosey-Goosey Governance: Four Misunderstood Terms in Corporate Governance in which they appear to think they’ve discovered what everyone has understood forever — that there are limits to structural solutions and that checklists of best practices are not especially helpful. We were very clear…

Interview With Ira Millstein — WSJ

One of the founding fathers and true visionaries of modern corporate governance is Ira Millstein. The WSJ asked him for his thoughts on the BRT’s stakeholder statement (he says it is not specific enough) and on the state of corporate governance today. An excerpt: In 1979, the Business Roundtable conducted a series of hearings and…

Do Corporate Governance Ratings change Investor Expectations? Evidence from Announcements by Institutional Shareholder Services | Review of Finance | Oxford Academic

Paul M Guest and Marco Nerino assess the impact of governance ratings. We continue to be very skeptical of any study focusing on the immediate impact of any particular information as being especially significant, but we believe this analysis is worth reviewing. This paper examines empirically the announcement effect of commercial corporate governance ratings on…

Toward Fair and Sustainable Capitalism: A Comprehensive Proposal to Help American Workers, Restore Fair Gainsharing Between Employees and Shareholders, and Increase American Competitiveness by Reorienting Our Corporate Governance System Toward Sustainable Long-Term Growth and Encouraging Investments in America’s Future by Leo E. Strine Jr.

One of the most thoughtful and knowledgable observers of American corporate governance, Delaware Chief Justice Leo Strine, Jr., believes that companies and our economy will only be robust and vibrant if investors and boards make sure to align the incentives of top executives with ESG goals. He proposes better disclosure and giving employees more power…

WeWork IPO Struggles with Valuation and Governance Concerns

Since We filed the prospectus for its initial public offering last month, it has been besieged with criticism over its governance, business model and ability to turn a profit. It is now expecting an IPO valuation as low as a third of the $47 billion sticker price it garnered in a January funding round—a drop…

More Reactions to the Business Roundtable’s Stakeholder Statement

More reactions: From the always-thoughtful and insightful Doug Chia: Like the Commonsense Governance Principles (1.0 and 2.0), it’s not about what is being said, which we all know is nothing new (e.g., the J&J Credo was written in the 1943; my most recent boss at The Conference Board, Steve Odland, often says “‘CEO’ stands for…