This paper examines the influence of proxy advisors (PA) on firm voting outcomes, policies and value. We measure PA influence with shareholders' historical propensity to follow PA recommendations. PA influence increases the impact of PA recommendations on proxy voting outcomes and firm policies....

We study corporate hedging during the 2007-2008 financial crisis. We find that hedging programs are fragile. Firms whose lenders suffered losses on their mortgage portfolios were more likely to lose access to over-the-counter derivatives, and this effect was strongest among unrated and below...

Six years after the collapse of Lehman Brothers, the question of whether the U.S. financial system has become less risky remains unanswered. On the one side, new regulations including Dodd-Frank and Basel III have made improvements by requiring higher bank capital, and financial institutions...

Why is poor governance pervasive in the mutual fund industry? Researchers, practitioners and regulators have attributed this failing to a lack of director independence from fund management. This paper proposes an alternate explanation: fund governance is contagious. Fund directors act as...

We study the loosening of restrictions on the use of leverage, derivatives, and illiquid assets by mutual funds. In contrast to previous studies, we find that the allowance of these complex instruments is associated with poor performance and higher risk. The underperformance is most acute during...