This essay discusses the corporate governance of banks. Bank managers must balance competing demands from shareholders and regulators, which distinguishes banks from most other firms. The essay is structured into three parts. The theoretical section first broadly defines management and its...

Activists and journalists argue that allocation of greater control rights to shareholders mitigates the classic agency problem in corporations. I show that the effectiveness of such control rights depends on the cost of acquiring information on a firm. These rights have a positive effect on firm...

Shareholder activism in France is increasingly influenced by networks of hedge fund investors and other specialized players (including proxy advisory firms and investor associations). In the last few years, these networks have professionalized the way shareholder activism is conducted in the...

In this Article, we propose legal reforms to empower shareholders in public corporations. Most shareholders participate in corporate governance in three ways: they vote, they sell, and they sue. We would expand the menu for shareholders in public corporations by enabling them to contract using...

The role of state-sponsored entities as participants in the financial markets is often overlooked in the human rights discourse. This paper will examine the role of the state in financial markets not as the lawmaker, regulator, or utilizer of hard power, but as an equity investor of...

Motivated by agency theory, we investigate how a firm’s overall quality of corporate governance affects its dividend policy. Using a large sample of firms with governance data from The Institutional Shareholder Services (ISS), we find that firms with stronger governance exhibit a higher...

In their 2008 paper, Dahya, Dimitrov, and McConnell find that corporate values are lower when a higher fraction of the firm’s board of directors is associated with the dominant shareholder, especially in countries with weak legal regimes. Our study presents a simple model that is consistent...

Law and Finance theory stresses the importance of shareholder rights for the reliability and development of capital markets. Many European Parliaments picked up this corporate governance issue. We expand the analysis of Lele and Siems (2007) and show that the number of shareholder rights grew...

This paper critically examines the conventional view that the lack of fiduciary duty protections for corporate shareholders in civil law systems explains crucial differences in corporate structure and finance. It questions the thesis that the structure of civil law systems militates against the...

Shareholder and public dissatisfaction with executive compensation has led to calls for an annual shareholder advisory vote on a firm's compensation pratices and policies, so-called "say on pay." Proposed federal legislation would mandate "say on pay" generally for US public companies. This...