The State of Corporate Governance Research

Bebchuk, Lucian Arye; Weisbach, Michael S.

doi:10.1007/978-3-642-31579-4_14

Cited by 44 publications

(60 citation statements)

References 103 publications

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“…Furthermore, it is commonly assumed that boards that are more independent (i.e., they contain more directors without social or business connections to management) are more effective from a shareholders’ perspective. Although initial work on nonfinancial firms failed to find a link between board independence and higher firm value, there is a growing body of empirical research indicating that director independence is associated with improved board decisions (see Bebchuk and Weisbach, , for a discussion). Section reviews recent studies addressing this issue for financial firms.…”

Section: Board Effectivenessmentioning

confidence: 99%

Corporate Governance of Banks: A Survey

Haan

Vlahu

2015

Journal of Economic Surveys

199

105

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This paper reviews the empirical literature on the corporate governance of banks. We start by highlighting the main differences between banks and nonfinancial firms and focus on three characteristics that make banks special: (i) regulation, (ii) the capital structure of banks, and (iii) the complexity and opacity of their business and structure. Next, we discuss the characteristics of corporate governance in banks and how they differ from the governance of nonfinancial firms. We then review the evidence on three governance mechanisms: (i) boards, (ii) ownership structures, and (iii) executive compensation. Our review suggests that some of the empirical regularities found in the literature on corporate governance of nonfinancial institutions, such as the positive (negative) association between board independence (size) and performance, do not hold for banks. Also, existing work provides no conclusive results regarding the relationship between different governance mechanisms and various measures for banks’ performance. We discuss potential explanations for these mixed results.

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Section: Board Effectivenessmentioning

confidence: 99%

Corporate Governance of Banks: A Survey

Haan

Vlahu

2015

Journal of Economic Surveys

199

105

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“…In contrast, the managerial power view considers executive remuneration arrangements as a product of close interpersonal relationships and negotiations between powerful corporate executives, especially CEOs, and weak corporate boards, which leads to the creation of inefficient managerial contracts that exacerbates agency problems by increasing the divergence of interests between managers and shareholders (Sapp, ; Bebchuk and Weisbach, ). As executives are assumed to set their own pay (Bebchuk and Fried, , ; Van Essen et al ., ), the managerial power view expects executive compensation not to be tied necessarily to corporate performance.…”

Section: Prior Literature On Executive Compensation and Corporate Permentioning

confidence: 99%

Executive Compensation, Corporate Governance and Corporate Performance: A Simultaneous Equation Approach

et al. 2013

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This paper investigates the association between executive compensation and performance. It uniquely utilises a comprehensive set of corporate governance mechanisms within a three-stage least squares (3SLS) simultaneous equation framework. Results based on estimating a conventional single equation model indicate that the executive pay and performance sensitivity is relatively weak, whereas those based on estimating a 3SLS model generally suggest improved executive pay and performance sensitivity. Our findings highlight the need for future research to control for possible simultaneous interdependencies when estimating the executive pay and performance link. The findings are generally robust across a raft of econometric models that control for different types of endogeneities, executive pay and performance proxies.JEL Classification: G32; G34; G38

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“…See, for example, Shleifer and Vishny (), Claessens and Fan (), McGee (), Bebchuk and Weisbach (), Brown, Beekes, and Verhoeven (), Belloc (), and Claessens and Yurtoglu () for an excellent review of the related literature.…”

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confidence: 99%

Corporate governance and firm performance relationship: Implications for risk‐adjusted return behavior

Dash

Raithatha

2019

Manage Decis Econ

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We examine the impact of corporate governance on firm performance and stock return behavior using panel data for Indian listed firms for 2006 to 2015. Our results suggest that corporate governance improves firm performance. However, corporate governance information fails to provide excess risk‐adjusted returns to investors, as governance information is well assimilated in prevailing stock prices. In addition to extending the scant literature focused on emerging markets, our findings will prove useful to investors, fund managers, and rating agencies in making investment decisions and regulators in assessing the impact of governance norms.

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The State of Corporate Governance Research

Cited by 44 publications

References 103 publications

Corporate Governance of Banks: A Survey

Corporate Governance of Banks: A Survey

Executive Compensation, Corporate Governance and Corporate Performance: A Simultaneous Equation Approach

Corporate governance and firm performance relationship: Implications for risk‐adjusted return behavior

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