Business Commons^™

Governance Of The Governing: Accountability And Motivation At The Top Of Public Organizations, Donald Nordberg

Donald Nordberg

Developments in the governance practices in UK public organizations show how ideas from the governance of listed companies have translated into public sectors bodies, government departments and the governance of parliament itself. The use of independent, non-executives directors in public bodies encapsulates the tension in the private sector between the service role of directors and how they control the executives who manage the business. This paper gives a preliminary examination of three public bodies, comparing how reform of their governance mechanisms has affected tensions in accountability and director motivation. What is evident is that the changes involve greater emphasis on …

Corporate Myths : Sourcing And Vendor Management In Asia Pacific, Singapore Management University

Perspectives@SMU

Sourcing and vendor management need the urgent attention of senior management. The current uptick in poor and corrupt sourcing practices and weak governance provide a compelling reason.

Political Connection And Firm Value, James S. Ang, David K. Ding, Tiong Yang Thong

Research Collection Lee Kong Chian School Of Business

We study the effect of political connection (PC) on company value in an environment where low PC is due to better institutions and not confounded by favorable social/cultural factors. We find that in Singapore, the only country that fits this description, PC in general adds little to the value of a company. However, in industries that are subject to more stringent government regulations, PC appears to be somewhat important. Robustness checks show that alternative PC variables give rise to similar results, and the addition of control variables do not drastically change the findings. Politically connected firms have higher managerial ownership …

Determinants Of Voluntary Board Remuneration Committee Formation And Composition, Pamela Kent, Kim Kercher, James Routledge

Pamela Kent

This study provides evidence on factors that determine the voluntary adoption of corporate governance recommendations regarding remuneration committees in 2008. The findings indicate that remuneration committee existence is significantly associated with insider share ownership, institutional shareholding and change in CEO. Composition of the committee is significantly explained by independent directors and complexity measured by geographical segments (marginally). Other variables controlled for are growth opportunities, free cash flow, asset turnover, size, governance quality, debt levels, age and the presence of a big four auditor.

The Merits Of Cooperative Corporate Governance In The Digital Age, Meredith-Anne Kurz

Meredith-Anne Kurz

No abstract provided.

Last Of The Tai-Pans: Improving The Sustainability Of Long-Term Financial Flows By Improving Hong Kong’S Corporate Governance, Bryane Michael

Bryane Michael (bryane.michael@stcatz.ox.ac.uk)

Hong Kong leads the rank tables as an international financial centre. However, the data indicate that some parts of her corporate governance arrangements probably detract from – rather than contribute to – that leading position. In this brief, we show how excessive shareholding concentration, probably self-dealing, insufficient minority shareholder recourse to mechanisms aimed at protecting their investments, and Hong Kong’s close links with several “tax havens” probably weaken Hong Kong’s role as an international financial centre. We present 18 recommendations aimed at increasing the volume of international financial capital coming to the city by improving Hong Kong’s corporate governance.

Teaching Citizens United V. Fec In The Introductory Business Associations Course, Michael D. Guttentag

Journal of Business & Technology Law

No abstract provided.

Who Calls The Shots?: How Mutual Funds Vote On Director Elections, Stephen J. Choi, Jill E. Fisch, Marcel Kahan

All Faculty Scholarship

Shareholder voting has become an increasingly important focus of corporate governance, and mutual funds control a substantial percentage of shareholder voting power. The manner in which mutual funds exercise that power, however, is poorly understood. In particular, because neither mutual funds nor their advisors are beneficial owners of their portfolio holdings, there is concern that mutual fund voting may be uninformed or tainted by conflicts of interest. These concerns, if true, hamper the potential effectiveness of regulatory reforms such as proxy access and say on pay. This article analyzes mutual fund voting decisions in uncontested director elections. We find that …

Mandating Board-Shareholder Engagement?, Lisa Fairfax

All Faculty Scholarship

This Article not only argues that corporations must be encouraged to enhance the level of communication between shareholders and the board, but also maintains that the benefits of increased engagement are significant enough that we should consider developing standards for incentivizing, if not mandating, more robust board-shareholder engagement for corporations that fail to respond to such encouragement. In the last several years, shareholders not only have gained increased authority over corporate elections and governance matters, but also have demonstrated a willingness to use that authority to challenge, and even reject, management policies and practices. Shareholders also have begun to demand …

The Long Road Back: Business Roundtable And The Future Of Sec Rulemaking, Jill E. Fisch

All Faculty Scholarship

The Securities and Exchange Commission has suffered a number of recent setbacks in areas ranging from enforcement policy to rulemaking. The DC Circuit’s 2011 Business Roundtable decision is one of the most serious, particularly in light of the heavy rulemaking obligations imposed on the SEC by Dodd-Frank and the JOBS Act. The effectiveness of the SEC in future rulemaking and the ability of its rules to survive legal challenge are currently under scrutiny.

This article critically evaluates the Business Roundtable decision in the context of the applicable statutory and structural constraints on SEC rulemaking. Toward that end, the essay questions …

Adapting To The New Shareholder-Centric Reality, Edward B. Rock

All Faculty Scholarship

After more than eighty years of sustained attention, the master problem of U.S. corporate law—the separation of ownership and control—has mostly been brought under control. This resolution has occurred more through changes in market and corporate practices than through changes in the law. This Article explores how corporate law and practice are adapting to the new shareholder-centric reality that has emerged.

Because solving the shareholder–manager agency cost problem aggravates shareholder–creditor agency costs, I focus on implications for creditors. After considering how debt contracts, compensation arrangements, and governance structures can work together to limit shareholder–creditor agency costs, I turn to available …

Sue On Pay: Say On Pay’S Impact On Directors’ Fiduciary Duties, Lisa Fairfax

All Faculty Scholarship

This Article advances a normative case for using say on pay litigation to enhance the state courts’ role in policing directors’ compensation decisions. Outrage over what many perceive to be excessive executive compensation has escalated dramatically in recent years. In 2010, such outrage prompted Congress to mandate say on pay—a nonbinding shareholder vote on executive compensation. In the wake of say on pay votes, some shareholders have brought suit against directors alleging that a negative vote indicates a breach of directors’ fiduciary duties. To date, the vast majority of courts have rejected these suits. This Article insists that such rejection …