Governmental and scientific news and insights on investor oriented environmental, social, and governance (ESG) data.

The Impact of Managerial Incentives on IPO Mortality

We find that IPO firms with generously compensated CEOs and large pay disparities between the CEO and other top executives have lower failure rates and longer time to survive in subsequent periods following the offering. Economically, firms with CEO pay (pay gaps) in the 75th percentile have a failure risk that is, on average, 11.56% [...]

By |2018-11-06T14:21:53+00:00November 6th, 2018|Firm Value, Governance|0 Comments

Zombie Board: Board Tenure and Firm Performance

We show that board tenure exhibits an inverted U‐shaped relation with firm value and accounting performance. The quality of corporate decisions, such as M&A, financial reporting quality, and CEO compensation, also has a quadratic relation with board tenure. Our results are consistent with the interpretation that directors’ on‐the‐job learning improves firm value up to a [...]

By |2018-11-06T14:19:40+00:00November 6th, 2018|Firm Value, Governance, Indicators|0 Comments

Assessing the Value Relevance of Mandatory Business Model Disclosures

Purpose – Extra-financial information and narrative reporting has long been portrayed as a way of enhancing the informativeness and usefulness of traditional financial reporting. Numerous more or less regulated reporting initiatives have seen the light in the last 25 years, and the latest examples are offered by the Strategic Report of the UK Companies Act [...]

By |2018-11-06T14:15:39+00:00November 6th, 2018|CSR, Firm Value, Governance, Law|0 Comments

The impact of environmental, social, and governance disclosure on firm value: The role of CEO power

Using a large cross-sectional dataset comprising of FTSE 350 listed firms, this study investigates whether superior environmental, social and corporate governance (ESG) disclosure affects firm value. We find a positive association between ESG disclosure level and firm value, suggesting that improved transparency and accountability and enhanced stakeholder trust play a role in boosting firm value. [...]

By |2018-11-06T14:08:17+00:00November 6th, 2018|ESG, Firm Value, Governance|0 Comments

Investors’ Attention to Corporate Governance

We develop a direct measure of investor scrutiny to assess the extent of governance-related research conducted by 97 mutual fund families in 3,706 companies, over a seven-year period. Our governance measure is based on the number of times each investor accesses each firm’s proxy and proxy-related SEC filings on EDGAR, over the months leading up [...]

By |2018-06-28T12:45:58+00:00June 28th, 2018|ESG, Governance, Investors|0 Comments

Governance, Information Flow and Stock Returns: Evidence from a Natural Experiment

This paper shows that the relationship between corporate governance indices and stock returns has reappeared after a few years of its disappearance. We find that poor governance stocks have outperformed good governance stocks in recent years, indicating a directionally opposite relation to the one that existed in the past. To explain this puzzling reversal, we [...]

By |2018-06-28T12:41:46+00:00June 28th, 2018|ESG, Firm Value, Governance|0 Comments

Which CSR Activities Are More Consequential? Evidence from the Great Recession

We exploit the Great Recession of 2008 to study how firms view corporate social responsibility (CSR). When confronted with an adverse exogenous shock, firms are forced to prioritize. Our results show that, during the Great Recession, firms do not lessen their overall CSR investments, suggesting that they recognize the importance of CSR. However, further analysis [...]

By |2018-03-30T13:42:31+00:00March 30th, 2018|CSR, ESG, Governance, Indicators, Investors|0 Comments

Female directors and real activities manipulation: Evidence from China

Unlike previous studies that focus on accrual-based earnings management, this study analyzes real activities manipulation and investigates whether female directors on boards of directors (BoDs) affect managers’ real activities manipulation. Using a large sample of 11,831 firm-year observations from Chinese listed companies from the 2000 to 2011 period, we find that higher female participation on [...]

By |2018-03-30T13:38:20+00:00March 30th, 2018|ESG, Gender inequality, Governance, Indicators, Risk|0 Comments

The Governance of Foundation-Owned Firms

The burgeoning literature on corporate governance, both in economics and in law, has focused heavily on the agency costs of delegated management. It is therefore striking to encounter a large number of well-established and highly successful companies that have long been under the complete control of a self-appointing board of directors whose compensation is divorced [...]

By |2018-03-02T11:28:24+00:00March 2nd, 2018|ESG, Governance|0 Comments

CEO Tenure and Stock Returns Performance

This study shows that CEO tenure has positive and robust predictive power on cross-sectional stock returns. We show that a hedge portfolio constructed based on CEO tenure yields an annualised alpha of 1.32% and attribute this to seasoned CEOs having greater firm-specific knowledge and experience.  Consistent with this explanation, we find that CEO tenure has [...]

By |2018-03-02T11:24:36+00:00March 2nd, 2018|ESG, Firm Value, Governance, Indicators|0 Comments