This paper surveys the literature criticizing the view that managers should run companies aiming to create shareholder value by maximizing stock prices. Based on a multidisciplinary approach, I include empirical and theoretical papers from fields such as corporate law, management, finance,...

Governance at banks, especially major banks, requires further reform, especially with respect to incentives. Supervisors are concerned that incentives may make executives prone to take “excessive” risks. Shareholders are concerned that banks rarely earn their cost of capital.What's needed is...

We show theoretically and empirically that executives are paid less for their own firm’s performance and more for their rivals’ performance if an industry’s firms are more commonly owned by the same set of investors. Higher common ownership also leads to higher unconditional total pay. We...

We present interview evidence from financial executives that highlights how thinking about culture in a quantitative way and making continuous investments in culture can amplify success, improve firm value, and help employees thrive in the new world of work. By reporting financial executives’...

This paper describes the conflict that is typical in a family business and highlights some of the major factors that make family business conflict unique from other types of interpersonal conflict in the workplace. Failure to adequately control conflict in family business may contribute to the...

The agency problem at the core of corporate law stems from a chronic potential conflict of interest between directors' self-interest and that of shareholders. Corporate law views directors' self-interest in terms of diverting welfare to directors at the expense of shareholders. Another component...

Little is known about why CEOs voluntarily purchase shares of their firm other than because they expect to directly profit from doing so. However, since CEOs are risk-averse, highly un-diversified, and face litigation costs from trading on favorable private information, direct profits are...

Can better firm ESG policies be attributed to a CEO’s style? We find that firms led by CEOs with not-for-profit sector work experience (socially engaged CEOs) possess better ESG ratings and superior real ESG outcomes. They receive higher satisfaction ratings from their employees, develop more...

This article examines the relationship between CEO characteristics and firm performance with a sample formed by the best performing CEOs in the world according to Harvard Business Review. The empirical analysis is based on descriptive statistics techniques and studies the universe of CEOs...

While Jensen and Meckling’s 1976 seminal work explores key aspects of the principal-agent relationship between owners and managers, they do not examine the principal’s decision on whether to hire the agent. An owner (principal) of a closely held firm can either hire someone to manage her...