The extant literature has used measurements of CEO risk-taking incentives which do not include the effects of termination provisions such as severance agreements. This paper provides a general form model that allows for the valuation and computation of CEO compensation structures including...

In recent years there have been two parallel discussions taking place in the US and in the UK about the role which institutional shareholders should play in governing the corporation. In the US this discussion is around the idea of shareholder empowerment, in the UK it is around shareholder...

In within-firm analysis of 1,805 executives, executives implicated in financial reporting fraud cases have significantly stronger equity incentives than their within-firm peers who are not implicated in the fraud. Executives implicated in fraud cases also have significantly stronger equity...

This study examines the impact of shareholder rights on the wealth effects of privately negotiated stock repurchases. Our results show that wealth gains are lower when shareholder rights are more suppressed. We also find that the premium paid for shares is inversely related to the strength of...

We examine the relation between passive ownership and financial reporting quality measured by Beneish's (1999) earnings' manipulation score (M-score). We find that passive ownership is negatively related to M-score and to the likelihood of being designated as a “manipulator” firm. However,...

We hypothesize that CSR serves as a control mechanism to curb excessive risk taking and to reduce excessive risk avoidance. Firms with CSR focus must balance the interests of multiple stakeholders, and therefore, must allocate resources to satisfy both investing and noninvesting stakeholders'...

The corporate governance literature has shown that self-interested controlling owners tend to divert corporate resources for private benefits at the expense of other shareholders. Such behavior leads the controlling owners to prefer long maturity debt to short maturity debt, to avoid frequent...

This study aimed to establish the nexus between CEO power and bank risk. Previous studies on how CEO power affects risk-taking have produced mixed results. Some studies show that CEO power reduces risk, while others show the reverse. This lack of conclusive findings motivated this study. This...

This study contributes to the emerging literature on board co-option by examining how and to what extent co-opted directors influence managers’ attitudes about earnings management. We find robust evidence that co-option mitigates both real activities and accrual-based earnings management. Our...

The article formulates the information theory of firm, introduces the concept of firm as an operating system, which controls the firm’s operation by the means of the information resources processing, in an analogy with the operating system at a microprocessor in the computing devices,...