The Making of a Daredevil CEO: Why Stock Options Lead to More Risk Taking

New research from Wharton shows that stock options lead to more risk taking by CEOs.

The research is presented in a new paper, “CEO Compensation and Corporate Risk Taking: Evidence from a Natural Experiment,” by Gormley, David Matsa, a professor at Northwestern University’s Kellogg School of Management, and Todd Milbourn, a …… continue reading >>

Doctor of Stewardship Wanted

It is often argued that poor governance structures prepared the ground for the financial crisis. The lack of shareholder engagement in particular is seen to have enabled banks to take on more and more risk. In response, the UK Financial Reporting Council issued the UK Stewardship Code which “aims to enhance the quality of …… continue reading >>

The value of collective engagement – what’s the academic evidence?

One of the key benefits of an active network like the corporate governance community is that the ever increasing reading pile gets shared around. Jim McRitchie, the noted US corporate governance blogger has done all of us a timely favour with a round up of a number of …… continue reading >>

ITV & The Irrational Quest for Charismatic CEOs

[amazon-product alink="00607C" bordercolor="00607C" height="240"]0691120390[/amazon-product]

Life is full of strange coincidences. As the mobile phone rang on Sunday morning with a question from a journalist about Tony Ball turning down a proposed £20 million package to take the hot seat at ITV, I happened to be reading a review of Rakesh Khurana’s 2002 …… continue reading >>

He who shouts loudest: who’s pulling the strings of cross-border voting reform?

Any choral singer will be familiar with the concept: a choir singing an acapella section will often naturally go ‘flat and lose pitch’, only to have to painfully re-adjust pitch when the orchestra joins in. Conversely, if the orchestra were to be playing in the wrong key (as a violinist and singer, a cruel …… continue reading >>

Beware of Global Governance Conformance

The quest for a single set of global governance standards is misguided and investors should stop using global governance standards based on US policy approaches. That’s the conclusion of Lucian Bebchuk and Assaf Hamdani in their latest paper: “The Elusive Quest for Global Governance Standards”.

The key issue at the heart of what many …… continue reading >>

Joint Chair/CEO – UK shareholders push for change

Two notable shareholder resolutions on both sides of the Atlantic have put the role of UK investors in pressing for change at quoted companies firmly in the spotlight.

Texas Instruments (TI) has come under close scrutiny from RailPEN, the investment arm of the UK’s Railways Pension Fund and one …… continue reading >>

The market is dead, long live the market

Nick Hassel in The Times commented earlier this month: “The stock market has been declared dead many times before. We heard this in 1979, in 2003, and are hearing it now in 2009. The consolation is that, on those two previous occasions, the desire to obituarise was just another sign that …… continue reading >>

Get Adobe Flash playerPlugin by wpburn.com wordpress themes