Download or read book Optimal Board Independence with Gray Independent Directors written by Bartolomé Pascual-Fuster and published by . This book was released on 2017 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recommendations of codes on board independence do not match the predictions of optimal board structure theories. We investigate whether firms solve this tradeoff between optimal and recommended levels with gray independent directors, those who do not achieve the formal requirements of independence. We find that in many firms that comply on the proportion of independents, gray independent directors are necessary to reach the recommended level. Additionally, our results show that gray independent directors provide real board independence, suggesting that these directors are not used to solve the mentioned tradeoff. Our results also indicate that firms prefer to bear the cost of non-compliance rather than the cost of deviating from their optimal level of board independence. The empirical analysis, performed in an institutional context in which large controlling shareholders are predominant, indicates that ownership is the most relevant factor to explain optimal board structures.
Download or read book Corporate Governance and Directors Independence written by Yuan Zhao and published by Kluwer Law International B.V.. This book was released on 2011-01-01 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt: More and more, the agenda of corporate governance reform has been calling for a dramatic change in the composition and structure of boards of publicly traded companies, with particular criticism reserved for the role of independent directors. This timely, ground-breaking book takes a new and rigorous approach to this important issue. Investigating board independence from a distinctly original perspective, the author's systematic analysis explores the effective interaction of such aspects as the following: What specific functions are expected of independent directors? How these functions fit with the unitary board structure? Why independent directors are seen as inherently necessary for corporate governance? Whether board independence can be compatible with other governance mechanisms? How mainstream company law is applied to independent directors. The analysis leads to a series of solutions designed to eliminate the real and perceived obstacles to the proper functioning of independent directors. In the process, the author discusses such critical 'moments' in corporate governance as monitoring, public relations, social responsibility, shareholder activism, the danger of 'groupthink', remuneration, collective liability, and codes of conduct. The discussion and analysis chart a course through which independent directors can better serve the goal of improving the system of corporate governance. As such, it will be greatly appreciated by investors, corporate counsel for institutional investors, and policymakers and academics in relevant areas of both business and law.
Download or read book The Handbook of the Economics of Corporate Governance written by Benjamin Hermalin and published by Elsevier. This book was released on 2017-09-18 with total page 762 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. - Concentrates on underlying principles that change little, even as the empirical literature moves on - Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces - Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field's substantive findings, all of which help point the way forward
Download or read book In Search of Board Independence written by Joel F. Houston and published by . This book was released on 2019 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Former employee directors bring unique aspects to firm governance. While they have valuable firm-specific knowledge, their connections to current management often compromise their ability to serve as effective monitors. Consistent with this viewpoint, we find that the presence of former employee directors is associated with increased litigation risk. Our subsequent tests demonstrate that this positive relation is more pronounced when the former employee is 1) tied to current management, 2) holding critical monitoring position, and 3) replacing an outside director. We further highlight that the discretion in asserting the independence of former employee directors provides key insights into the firm's relative reporting conservatism and its true desire for independence. Notably, we find that litigation is more likely to occur when boards aggressively classify a former employee as an independent director. Building upon these key findings, we demonstrate that measures of a board's functioning independence should incorporate both the varying roles played by its gray directors and its decision on whether to classify former employee directors as independent or gray.
Download or read book Pay Without Performance written by Lucian A. Bebchuk and published by Harvard University Press. This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.
Download or read book The Non Correlation between Board Independence and Long Term Firm Performance written by Sanjai Bhagat and published by . This book was released on 2013 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The boards of directors of American public companies are dominated by independent directors. Many commentators and institutional investors believe that a quot;monitoring board,quot; composed almost entirely of independent directors, is an important component of good corporate governance. The empirical evidence reported in this Article challenges that conventional wisdom.We conduct the first large-sample, long-horizon study of whether the degree of board independence (proxied by the fraction of independent directors minus the fraction of inside directors on a company's board) correlates with various measures of the long-term performance of large American firms. We find evidence that low-profitability firms increase the independence of their boards of directors. But there is no evidence that this strategy works. Firms with more independent boards do not perform better than other firms. Our results support efforts by firms to experiment with board structures that depart from the conventional monitoring board.Note: This paper is identical to the article as published in the Journal of Corporation Law. The published article is available, without the Stanford Law and Economics cover page, at lt;a href=http://ssrn.com/abstract=313026gt;http://ssrn.com/abstract=313026lt;/agt.
Download or read book The Downside to Full Board Independence written by Olubunmi Faleye and published by . This book was released on 2016 with total page 2 pages. Available in PDF, EPUB and Kindle. Book excerpt: High-profile accounting and corporate governance scandals have resulted in significant changes in the structure of corporate boards of directors, in particular the development of independent boards in which the CEO is the only employee director. The downside: Independent board members may not understand the business well enough to make optimal strategic decisions.
Download or read book The Board of Directors written by Ettore Croci and published by Springer. This book was released on 2018-12-04 with total page 167 pages. Available in PDF, EPUB and Kindle. Book excerpt: Boards of directors are a central feature of any corporate governance regime. The role of directors and how they affect firm value and policies is examined in depth in academic literature. However, it is easy to get both lost and overwhelmed when searching through the literature review that investigates several characteristics, often one at the time. This book provides a careful and concise look at corporate finance literature, specifically with regard to the board of directors, summarizing the main findings and reconciling them. This book documents the pros and cons associated with the various attributes of the board and the directors as found in the current literature and provides sections geared specifically to practitioners in this space, as well, allowing for a better and more comprehensive description of this important corporate governance mechanism. The resulting book aims to facilitate the interpretation of changes in corporate governance through the lens of the recent academic literature.
Download or read book The Role of Independent Directors After Sarbanes Oxley written by Bruce F. Dravis and published by American Bar Association. This book was released on 2007 with total page 206 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is intended to provide independent directors and their advisors with an understanding of the primary legal and governance issues that have evolved in the corporate governance environment since the passage of the Sarbanes-Oxley Act in 2002. The text on the accompanying CD-ROM sourcebook offers hypertext linked footnotes to direct lawyers (or interested non-lawyers) to legal source material.
Download or read book The Independent Director in Society written by Gerry Brown and published by Springer Nature. This book was released on 2020-08-28 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: Things will always go wrong in organisations. The question is how quickly will they get caught and put right? The problem facing every organisation today – our businesses, universities, health services, or the many other sporting and charitable institutions that shape our society – is that the relationship between their executive management and those whose job it is to oversee them (whether they are called non-executive or independent directors, trustees, or governors) has become unbalanced. The Independent Director in Society shows how to rebalance it. Based on original, in-depth research from Henley Business School, this is the first book to survey and analyse the governance crisis right across society rather than just focus upon the business sector. The authors show that – despite their many differences – all organisations have many issues, behaviours and problems in common. The same problems require, in many cases, the same solutions. Sometimes they don’t. The authors offer two answers. The first lies in the realm of policy. Not a need for more legislation, but a move to give the existing codes of practice back their teeth and make them fit for purpose. The second lies with independent directors themselves. Urgent improvement is needed in standards of thought and action as well as the calibre of these directors. Above all, directors need to develop an independent mindset that will enable them to make better, more accurate decisions. There are many elements to creating this culture, including selection, training and education for directors, and support from chairs and executive teams, but most of all directors themselves must recognise their responsibilities in a complex and volatile world.
Download or read book The Director s Manual written by Peter C. Browning and published by John Wiley & Sons. This book was released on 2016-02-01 with total page 213 pages. Available in PDF, EPUB and Kindle. Book excerpt: Directors: Improve Board Performance The Director's Manual: A Framework for Board Governance offers current and aspiring board members essential up-to-date governance guidance that blends rigorous research-based information with the wisdom found only through practical, direct experience. The book's flexible approach to solving governance issues reflects the authors' belief that no two boards and the cultural dynamics that drive them are the same. As such, the advice offered reflects recognizable leadership dynamics and real world, relevant organizational situations. The book's two authors, Peter C. Browning, an experienced CEO and member of numerous boards and William L. Sparks, a respected organizational researcher, combine their individual experiences and talents to create a book that is both innovative and applicable to directors in any industry sector. Specific best practice guidance is designed to help board members and their directors understand the unique strengths and challenges of their own board while at the same time provide targeted information that drives needed improvements in board performance and efficiency. Specifically, this book will help board members: Explore practical advice on key issues, including selection, meeting schedules, and director succession Consider board performance from multiple perspectives, including cultural and group dynamics Discover how to effectively manage classic problems that arise when making decisions as a group Access a comprehensive set of assessment questions to test and reinforce your knowledge The Director's Manual: A Framework for Board Governance offers practical advice to guide you as you lead your organization's board.
Download or read book Independent Directors written by Wolf-Georg Ringe and published by . This book was released on 2013 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper re-evaluates the corporate governance concept of 'board independence' against the disappointing experiences during the 2007-08 financial crisis. Independent or outside directors had long been seen as an essential tool to improve the monitoring role of the board. Yet the crisis revealed that they did not prevent firms' excessive risk-taking; further, these directors sometimes showed serious deficits in understanding the business they were supposed to control, and remained passive in addressing structural problems.A closer look reveals that under the surface of seemingly unanimous consensus about board independence in Western jurisdictions, a surprising disharmony prevails about the justification, extent and purpose of independence requirements. These considerations lead me to question the benefits of the current system. Instead, this paper proposes a new, 'functional' concept of board independence. This would redefine independence to include those directors that are independent of the firm's controller, but at the same time it would require them to be more accountable to (minority) shareholders.
Download or read book An International Comparison of Corporate Governance Models written by Gregory Francesco Maassen and published by Gregory Maassen. This book was released on 1999 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book A critical discussion of the effectiveness of independent directors in monitoring and disciplining the senior executives in the UK and the US written by Thomas Böhm and published by GRIN Verlag. This book was released on 2019-06-24 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2019 in the subject Law - Civil / Private, Trade, Anti Trust Law, Business Law, grade: A, University of Edinburgh (Edinburgh Law School), course: Comparative Corporate Governance, language: English, abstract: Independent (non-executive) directors have long been regarded as an essential corporate governance instrument in monitoring and disciplining the senior executives of listed companies, both in the UK and the US. However, large corporate scandals and the global financial crisis at the beginning of the 21st century have shown that independent directors have not entirely met the high expectations placed on them. Doubts about their effectiveness in holding the management to account have arisen. On this occasion, this essay critically discusses the effectiveness of independent directors in monitoring and disciplining the senior executives in the UK and the US. By exploring the role of independent directors, particular attention is paid to the limitations of the current governance systems from a legal and practical point of view. It becomes clear that many of the shortcomings attributed to the concept of director independence have arisen precisely from the requirement to have a majority of independent directors on the board. The essay also presents proposals to improve the effectiveness of independent directors. The essay is structured as follows. Section 2 explores the origins of independent directors in the UK and the US and answers the question why managers need to be monitored by (independent) directors. Section 3 then outlines the different standards and definitions of independence in the UK and US corporate governance systems. Subsequently, section 4 goes into more detail on the monitoring role of independent directors while stating the key components for effectiveness. Section 5 critically discusses the main limitations of independent directors in monitoring and disciplining the senior executives, followed by a series of proposals to improve their effectiveness. Section 6 concludes.
Download or read book High Growth Handbook written by Elad Gil and published by Stripe Press. This book was released on 2018-07-17 with total page 396 pages. Available in PDF, EPUB and Kindle. Book excerpt: High Growth Handbook is the playbook for growing your startup into a global brand. Global technology executive, serial entrepreneur, and angel investor Elad Gil has worked with high-growth tech companies including Airbnb, Twitter, Google, Stripe, and Square as they’ve grown from small companies into global enterprises. Across all of these breakout companies, Gil has identified a set of common patterns and created an accessible playbook for scaling high-growth startups, which he has now codified in High Growth Handbook. In this definitive guide, Gil covers key topics, including: · The role of the CEO · Managing a board · Recruiting and overseeing an executive team · Mergers and acquisitions · Initial public offerings · Late-stage funding. Informed by interviews with some of the biggest names in Silicon Valley, including Reid Hoffman (LinkedIn), Marc Andreessen (Andreessen Horowitz), and Aaron Levie (Box), High Growth Handbook presents crystal-clear guidance for navigating the most complex challenges that confront leaders and operators in high-growth startups.
Download or read book The New Insiders written by Yaron Nili and published by . This book was released on 2017 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Director independence has been a cornerstone of modern corporate governance. Regulators, scholars, companies and shareholders have all placed a strong emphasis on director independence as a means to ensure that investors' interests in their companies are well served. But what makes a director independent? While regulators and stock exchanges have tackled this elusive standard in different ways, the end goal is always the same - ensuring that the director is able to exercise truly independent judgment and further the best interests of shareholders. Surprisingly, these regulatory bodies have failed to consider the impact board tenure might have on director independence. This Article seeks to fill this void, highlighting the potential effect director tenure has on director independence. Providing novel empirical data that reveals a significant rise in director tenure over the last decade, the Article then strives to place this trend in the larger context of transformations in board structure. Specifically, the Article suggests that the trend of increased director tenure reflects a market attempt to push back against the regulatory emphasis on board independence that has forced companies to remove many of their high ranked executives from the boardroom. This reaction is manifest in the increased prevalence of the “new insider,” a hybrid board member who complies with current independence requirements but at the same time, through longer tenure and other attributes, possesses many of the traits that corporate insiders previously brought to the board table. Coupling this market movement with its potential impact on board independence, the Article then explores the benefits and risks of this new insider model and proposes a potential regulatory fix that would address director tenure without sacrificing the benefits that tenure can provide.
Download or read book Responsible Corporate Governance written by Maria Aluchna and published by Springer. This book was released on 2017-05-10 with total page 304 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book discusses the tasks and functions of corporate governance in the light of current challenges and the dynamics that arise from a broader approach to company management and the integration of corporate governance with corporate social responsibility (CSR) and sustainability. Addressing the corporate governance shortcomings that are believed to have contributed to the recent financial crisis, it explores the interplay between corporate governance and CSR, and includes examples of company practice to show how such changes affect the practices of shareholders, boards of directors and regulators. In particular, the book examines shareholders’ activities, their different investment strategies, specific reporting expectations and the submission of proposals to the annual meeting. Further, for boards of directors it explores the need to revise their tasks with respect to the criteria for executive appointments, their corporate strategy, performance measures and diversity recommendations, while for directors it provides recommendations to reconsider the structure of executive pay and performance incentives. Lastly, for regulators the book investigates the need to introduce new laws addressing, for instance, the need for integrated reporting, limiting the voice of short term oriented shareholders and providing guidelines for executive compensation.
