David Larcker, Brian Tayan

Corporate Governance Matters

A Closer Look at Organizational Choices and Consequences

• Gebundenes Buch

Produktbeschreibung

This comprehensive reference presents all the knowledge, models, and frameworks needed to implement and sustain superior corporate governance. Writing for directors, officers, and other stakeholders, two leading experts synthesize current research, covering compensation, CEO labor markets, board structure, succession, risk, international governance, reporting, audit, institutional and activist investors, governance ratings, and much more.

Produktdetails

• Verlag: Financial Times Prentice Hall
• Seitenzahl: 480
• Erscheinungstermin: Juli 2011
• Englisch
• Abmessung: 229mm x 152mm x 35mm
• Gewicht: 810g
• ISBN-13: 9780132180269
• ISBN-10: 013218026X
• Artikelnr.: 33147814

Inhaltsangabe

Preface     xviii
Chapter 1  Introduction to Corporate Governance     1
Self-Interested Executives    4
Defining Corporate Governance     8
Corporate Governance Standards     9
Best Practice or Best Practices? Does One Size Fit All?     12
Relationship between Corporate Governance and Firm Performance     13
Endnotes     15
Chapter 2  International Corporate Governance     19
Capital Market Efficiency     19
Legal Tradition     22
Accounting Standards     23
Enforcement of Regulations     25
Societal and Cultural Values     26
Individual National Governance Structures     28
    United States     29
    United Kingdom     31
    Germany     35
    Japan     37
    South Korea    40
    China    41
    India    43
    Brazil    44
    Russia    46
Endnotes    47
Interlude     53
Chapter 3  Board of Directors: Duties and Liability     55
Board Responsibilities     55
Board Independence     56
The Operations of the Board     57
    Board Committees     60
Duration of Director Terms     64
Director Elections     64
Removal of Directors     66
Legal Obligations of Directors     66
    Fiduciary Duty     67
    Environmental, Social, and Governance (ESG)     70
    Disclosure Obligations under Securities Laws     71
    Legal Enforcement of State Corporate Law (Fiduciary Duties)     72
    Legal Enforcement of Federal Securities Laws     73
    Director Indemnification and D&O Insurance     73
Endnotes     75
Chapter 4  Board of Directors: Selection, Compensation, and Removal     79
Market for Directors     79
    Criteria for Director Recruitment     80
    Active CEOs     81
    International Experience     82
    Special Expertise     82
    Diverse Directors     84
    Professional Directors     85
    Disclosure Requirements for Director Qualifications     86
Director Recruitment Process     87
Director Compensation     90
    Ownership Guidelines     95
    Board Evaluation     96
Removal of Directors     98
Endnotes     102
Chapter 5  Board of Directors: Structure and Consequences     109
Board Structure     110
    Chairman of the Board     113
    Lead Independent Director     116
    Outside Directors     119
    Board Independence     122
    Independent Committees     125
    Bankers on the Board     126
    Financial Experts on Board     127
    Politically Connected Boards     127
    Employee Representation     129
    Boards with Busy Directors     131
    Interlocked (or Connected) Boards     134
    Committee Overlap     135
    Board Size     136
    Board Diversity     136
    Female Directors     138
Summary     139
Endnotes     141
Interlude     150
Chapter 6  Strategy, Performance Measurement, and Risk Management     151
Organizational Strategy     151
Strategy Implementation Process     154
Business Model Development and Testing     156
    Example 1: Fast-Food Chain and Employee Turnover     156
    Example 2: Financial Services Firm and Investment Advisor Retention    
158
Key Performance Measures     159
How Well Are Boards Doing with Performance Measures and Business
Models?     162
Risk and Risk Management     164
Risk and Risk Tolerance     165
Risk to the Business Model     166
Risk Management     169
Oversight of Risk Management     172
Assessing Board Performance on Risk Management     174
Cybersecurity     175
Endnotes     177
Chapter 7  CEO Selection, Turnover, and Succession Planning     181
Labor Market for Chief Executive Officers     181
Labor Pool of CEO Talent     184
CEO Turnover     186
Newly Appointed CEOs     191
Models of CEO Succession     193
    External Candidate     193
    President and/or Chief Operating Officer     195
    Horse Race     196
    InsideOutside Model     197
The Succession Process     197
How Well Are Boards Doing with Succession Planning?     201
Executive Search Firms     203
Endnotes     205
Chapter 8  Executive Compensation and Incentives     211
The Controversy over Executive Compensation     212
Competing Theories of CEO Pay     213
Components of Compensation     214
Determining Compensation     218
Compensation Consultants     221
Compensation Levels     221
Ratio of CEO Pay to Other Top Executive Pay     226
Ratio of CEO Pay to Average Employee Pay     229
Compensation Mix     230
Short-Term Incentives     233
Long-Term Incentives     235
Benefits and Perquisites     237
Compensation Disclosure     238
Say-on-Pay     239
Competing Theories of CEO Pay     242
Endnotes     243
Chapter 9  Executive Equity Ownership     251
Equity Ownership and Firm Performance     251
Equity Ownership and Risk     254
Equity Ownership and Agency Costs     259
Accounting Manipulation     260
Manipulation of Equity Grants     261
    Other Examples of Value Extraction through Timing     263
Equity Sales and Insider Trading     264
Rule 10b5-1     267
Hedging     269
Pledging     273
Repricing and Exchange Offers     274
Endnotes     277
Chapter 10  Financial Reporting and External Audit     285
The Audit Committee     285
Accounting Quality, Transparency, and Controls     286
Financial Reporting Quality     288
    Non-GAAP Reporting     290
Financial Restatements     291
Models to Detect Accounting Manipulations     297
The External Audit     299
Audit Quality     302
Structure of Audit Industry     302
Impact of SarbanesOxley     305
External Auditor as CFO     307
Auditor Rotation     308
Endnotes     310
Chapter 11  The Market for Corporate Control     319
The Market for Corporate Control     320
Stock Market Assessment of Acquiring and Target Firms     324
    Who Gets Acquired?     324
    Who Gets the Value in a Takeover?     327
Antitakeover Protections     330
Antitakeover Actions     331
    Poison Pills     333
    Staggered Board     335
    State of Incorporation     337
    Dual-Class Shares     339
Warding Off Unwanted Acquirers     341
Endnotes     344
Chapter 12  Shareholders and Shareholder Activism     351
The Role of Shareholders     351
Blockholders and Institutional Investors     354
Institutional Investors and Proxy Voting     357
Activist Investors     359
    Pension Funds     361
    ESG and Socially Responsible Investing     363
    Individual Activist Investors     364
    Activist Hedge Funds     366
The Rise of Index Investing     370
Shareholder Democracy and Corporate Engagement     371
    Majority Voting in Uncontested Director Elections     371
    Proxy Access     372
    Proxy Voting     372
    Corporate Engagement     374
Proxy Advisory Firms     375
Endnotes     381
Chapter 13  Stakeholders and Stakeholder Activism     391
Pressure to Incorporate Stakeholder Interests     392
Legal and Economic Implications     397
Director and CEO Views on Stakeholders    401
ESG Metrics and Disclosure    402
External Assessment of ESG    407
Endnotes    417
Chapter 14  Corporate Governance and ESG Ratings    425
Third-Party Ratings    425
Credit Ratings    426
Commercial Corporate Governance Ratings    428
    ISS: Corporate Governance Quotient    428
    ISS: Governance Risk Indicators    430
    ISS: QualityScore    430
    MSCI ESG Governance Metrics    431
    Testing the Predictability of Corporate Governance Ratings    432
Governance Rating Systems by Academic Researchers    433
The Viability of Governance Ratings    438
ESG Ratings    439
    MSCI ESG    440
    Sustainalytics    441
    Vigeo Eiris    442
    HIP (Human Impact + Profit)    442
    ISS E&S Disclosure QualityScore    442
    TruValue Labs    443
    Evaluation of ESG Ratings    443
Endnotes    444
Chapter 15  Alternative Models of Governance    449
Family-Controlled Corporations    449
Venture-Backed Companies    452
Private Equity-Owned Companies    458
Nonprofit Organizations    462
Endnotes    466
Chapter 16  Summary and Conclusions    473
Testing Remains Insufficient    474
The Current Focus Is Misdirected    475
Important Variables Are Clearly Missing    476
Context Is Important    477
Rights of Shareholders and Stakeholders    478
Endnotes    478
Index    481