We examine whether the Sarbanes-Oxley Act has a major role in reducing the diversification discount and enhancing internal capital markets efficiency. The act proposes new rules and regulations on financial practice and reshapes corporate governance to insure alignment of incentives between...

Internal capital markets (ICMs) provide firms an alternative to costly external financing; however, they also provide an avenue to avoid the monitoring associated with issuing external capital. We argue that firms operating inefficient internal capital markets will avoid outside financing....

Personal managerial indiscretions are separate from a firm's business activities but provide information about the manager's integrity. Consequently, they could affect counterparties' trust in the firm and the firm's value and operations. We find that companies of accused executives experience...

While internal capital markets may afford firms a real option to avoid costly outside financing [Matsusaka and Nanda (2002)], we show that they also provide an option to avoid the monitoring that accompanies the raising of capital. Consistent with this view, we find conglomerates which...

It is controversial whether governance structure affects the value of the firm. This paper examines the sensitivity of firm value to capital expenditure under various levels of CEO power. The paper uses two measures of CEO power and finds that the greater the power of the CEO the less the...

We posit that placing insiders on the board facilitates information flows to outside directors, mitigates the CEO's role as information gatekeeper, and allows managers to be more independent of the CEO. We find that inside directors are more prevalent in environments of greater information...

We explore the labor market effects of gender and race by examining board leadership appointments. Prior studies are often limited by observing only hired candidates, whereas the boardroom provides a controlled setting where both hired and unhired candidates are observable. Although diverse...

The appointment of contributing directors is associated with immediate positive market reaction, and the presence of contributing directors in the board enhances long-run firm value. We identify the contribution of directors by alpha, or the abnormal risk-adjusted stock returns that are...

We use compensation consultant turnover to investigate optimal or excessive CEO compensation recommendations by consultants. Prior literature contends that consultants issue outsized pay recommendations in order to achieve repeat business; we present evidence suggesting their interests are,...

Direct listing offers a new, but unproven method of going public for industrial firms. We use prior direct listings by public non-listed REITs (PNLRs) as laboratory to explore the impact of exchange membership on the corporate governance resulting from these transactions. To that end, we examine...