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Full-Text Articles in Business
Is Corporate Social Responsibility An Agency Problem?, Hao Liang, Luc Renneboog
Is Corporate Social Responsibility An Agency Problem?, Hao Liang, Luc Renneboog
Research Collection Lee Kong Chian School Of Business
This chapter examines whether CSR investments occur mostly in firms with severe agency problems, which suggests that CSR is an agency issue. We demonstrate that this is not the case: CSR investments and performance are higher when dividends are high, leverage is high, cash flows and cash holdings are low, and when there is a high managerial pay-for-performance sensitivity. All these variables combined represent managerial discipline in terms of corporate investing. We also document that better legal protection of shareholder rights is positively related to CSR performance. This implies that when shareholders are more powerful relative to the management, the …
Powerful Blockholders And Ceo Turnover, Chi Shen Wei, Lei Zhang
Powerful Blockholders And Ceo Turnover, Chi Shen Wei, Lei Zhang
Research Collection Lee Kong Chian School Of Business
We identify the power of institutional blockholders to influence management using previous occurrences of forced CEO turnover at other firms in the blockholders’ overall portfolio. We create a “powerful blockholder linkage” measure that strongly predicts future forced CEO turnover. These effects are larger when “powerful” blockholders are more motivated to monitor and when they have had valuable monitoring experience. Moreover, firms with powerful blockholders display higher CEO turnover-performance sensitivity, pursue more value-increasing mergers, and have higher firm value. Overall, our results suggest that an identifiable group of powerful blockholders play an important role in corporate governance.
Governance And Post-Repurchase Performance, Gary Caton, Jeremy Goh, Yen Teik Lee, Scott Linn
Governance And Post-Repurchase Performance, Gary Caton, Jeremy Goh, Yen Teik Lee, Scott Linn
Research Collection Lee Kong Chian School Of Business
Payout policies based on share repurchase programs provide greater flexibility than do those based on cash dividends. We develop and test an empirical model in which strongly governed companies outperform weakly governed companies after announcing share repurchase programs. Our findings include positive associations between strong governance and both post-announcement adjusted operating performance and abnormal stock returns. The results are robust to sample selection bias, different sample criteria, governance measurement, and various control variables. In addition, governance strength is associated with larger post-announcement changes in CEO incentive compensation and merger and acquisition activity, both of which we argue are consistent with …
Governance Matter: Morningstar Stewardship Grades And Mutual Fund Performance, Jerry X. Cao, Aurobindo Ghosh, Jeremy Goh, Wee Seng Ng
Governance Matter: Morningstar Stewardship Grades And Mutual Fund Performance, Jerry X. Cao, Aurobindo Ghosh, Jeremy Goh, Wee Seng Ng
Research Collection Lee Kong Chian School Of Business
Mutual fund investors have the arduous task of disentangling luck from ability of mutual fund managers’ performance. In this paper we investigate the role of mutual fund corporate governance (measured by Morningstar Stewardship grade) in mutual fund performance. We propose an objective data-driven corporate governance score based on principal components of Morningstar Stewardship Grades. Furthermore, we establish corporate governance scores have Granger Causality on long-term risk-adjusted returns. The findings suggest that corporate governance grades of mutual funds carry information content beyond the usual star rating measures for predicting long-term mutual fund performance and provide an effective tool for selecting funds.
Open Market Share Repurchase Programs And Corporate Governance: Company Performance, Gary Caton, Jeremy Goh, Yen Teik Lee, Scott C. Linn
Open Market Share Repurchase Programs And Corporate Governance: Company Performance, Gary Caton, Jeremy Goh, Yen Teik Lee, Scott C. Linn
Research Collection Lee Kong Chian School Of Business
Payout policies based on share repurchase programs provide greater flexibility than do those based on cash dividends. We develop and test an empirical model in which strongly-governed companies outperform weakly-governed companies after announcing share repurchase programs. Our findings include positive associations between strong governance and both post-announcement adjusted operating performance and abnormal stock returns. The results are robust to sample selection bias, different sample criteria, governance measurement, and various control variables. In addition, governance strength is associated with larger post-announcement changes in CEO incentive compensation and merger and acquisition activity, both of which we argue are consistent with strongly-governed companies …