Twenty‐five years of corporate governance research … and counting

Denis, Diane K.

doi:10.1016/s1058-3300(01)00037-4

Cited by 331 publications

(257 citation statements)

References 18 publications

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“…This indicates that there must be alternative governance mechanisms to ownership control that keep managers working hard. The oft-mentioned alternative mechanisms are: competition, legal and moral constraints, public regulation, incentive pay aligned with owners' interests, and the management labor market (Hansmann, 1996, Denis, 2001, Jensen, 1993). …”

Section: Ownership Variable # 2: the Cost Of Managerial Opportunismmentioning

confidence: 99%

The Cost of Ownership in Microfinance Organizations

2009

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We compare the ownership-cost of Shareholders Firms (SHFs), Non Profit Organizations (NPOs), and Cooperatives (COOPs) involved in microfinance. A paradoxical situation motivates us: most providers, both historically and today, are NPOs or COOPs, while policy papers advocate SHFs. We lay out a theoretical framework to understand ownership costs in microfinance organizations better. We propose that cost variables related to market contracting favor NPOs and COOPs, whereas most cost variables related to the practice of ownership favor SHFs. We conclude that what best serves the customers is the coexistence of ownership types and call for empirical research to test this theory.32

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Section: Ownership Variable # 2: the Cost Of Managerial Opportunismmentioning

confidence: 99%

The Cost of Ownership in Microfinance Organizations

2009

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“…20 This is in addition to the question whether earnings management is a problem of sufficient severity to justify such a wide discussion. See Denis (2001) for an insight to the breath of the literature. 21 Larcker et al (2005) show the limited use of strictly numerical tools and benchmarks in assessments of managerial conduct.…”

Section: Critique On Using Rational-choice Concepts In Corporate Govementioning

confidence: 99%

History repeats itself: The failure of rational choice models in corporate governance

Marnet

2007

Critical Perspectives on Accounting

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Conventional proposals to reform corporate governance based on the rational model of decision making may be insufficient in preventing future corporate debacles. Typically underestimated are the pressures from conflicts of interest and bias on reputational intermediaries. Judgements and choices made by auditors during professional engagements may not strictly adhere to the rational model of decision making. This is of significance with regard to the gatekeeper function of auditors and relevant legislation. A discussion on earnings management elaborates by suggesting that strictly numerical measures are not a reliable guide to the quality of corporate governance. It is suggested that our understanding of monitor behaviour in corporate governance would be improved by placing it on psychologically more realistic foundations. Some of these foundations are introduced.

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“…board size, board independence, board meetings and board expertise, in our regression models. Larger boards with higher proportion of independent directors who meet regularly and have financial expertise are deemed more effective monitors and more likely to influence executive compensation (Murphy 1999;Denis 2001;Hermalin 2005;Cordeiro and Sarkis 2008). We also include CEO ownership as a control variable because prior studies suggest it is a potential driver of CEO compensation (Finkelstein 1992;Berrone and Gomez-Mejia 2009a;Cai et al 2011).…”

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confidence: 99%

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011-2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management's behaviour and be concerned about the achievement of sustainability goals.

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Twenty‐five years of corporate governance research … and counting

Cited by 331 publications

References 18 publications

The Cost of Ownership in Microfinance Organizations

The Cost of Ownership in Microfinance Organizations

History repeats itself: The failure of rational choice models in corporate governance

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

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