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Author: Donald H. Chew Publisher: Columbia University Press ISBN: 9780231519984 Category : Business & Economics Languages : en Pages : 388
Book Description
Corporate governance constitutes the internal and external institutions, markets, policies, and processes designed to help companies maximize their efficiency and value. In this collection of classic and current articles from the Journal of Applied Corporate Finance, thought leaders such as Michael Jensen and Robert Monks discuss the corporate mission of value maximization and the accomplishments and limitations of the U.S. governance system in achieving that end. Essays address the elements driving corporate value: the board of directors, compensation for CEOs and other employees, incentives and organizational structure, external ownership and control, role of markets, and financial reporting. They evaluate best practice methods, challenges in designing equity plans, transferable stock options, the controversy over executive compensation, the values of decentralization, identifying and attracting the "right" investors, the evolution of shareholder activism, creating value through mergers and acquisitions, and the benefits of just saying no to Wall Street's "earnings game." Grounded in solid research and practice, U.S. Corporate Governance is a crucial companion for navigating the world of modern finance.
Author: Theodore Clark Moorman Publisher: ISBN: Category : Languages : en Pages :
Book Description
Extant literature finds that long-term abnormal stock returns are generated by a strategy based on corporate governance index values (Gompers, Ishii, and Metrick2003). The result is inconsistent with efficient markets and suggests that information about governance is not accurately reflected in market data. Control firm portfolios are used to mitigate model misspecification in measuring long-term abnormal returns. Using a number of different matching criteria and governance indices, no long-term abnormal returns are found to trading strategies based on corporate governance. The effect of a change in governance on firm value is mixed, but some support is found for poor governance destroying firm value. These results have a number of implications for practitioners, researchers, and policy makers.
Author: Donald H. Chew Publisher: Columbia University Press ISBN: 9780231519984 Category : Business & Economics Languages : en Pages : 388
Book Description
Corporate governance constitutes the internal and external institutions, markets, policies, and processes designed to help companies maximize their efficiency and value. In this collection of classic and current articles from the Journal of Applied Corporate Finance, thought leaders such as Michael Jensen and Robert Monks discuss the corporate mission of value maximization and the accomplishments and limitations of the U.S. governance system in achieving that end. Essays address the elements driving corporate value: the board of directors, compensation for CEOs and other employees, incentives and organizational structure, external ownership and control, role of markets, and financial reporting. They evaluate best practice methods, challenges in designing equity plans, transferable stock options, the controversy over executive compensation, the values of decentralization, identifying and attracting the "right" investors, the evolution of shareholder activism, creating value through mergers and acquisitions, and the benefits of just saying no to Wall Street's "earnings game." Grounded in solid research and practice, U.S. Corporate Governance is a crucial companion for navigating the world of modern finance.
Author: Wolfgang Drobetz Publisher: ISBN: Category : Languages : en Pages : 51
Book Description
Recent empirical work shows that a better legal environment leads to lower expected rates of return in an international cross-section of countries. This paper investigates whether differences in firm-specific corporate governance also help to explain expected returns in a cross-section of firms within a single jurisdiction. Constructing a corporate governance rating (CGR) for German firms, we document a positive relationship between the CGR and firm value. In addition, there is strong evidence that expected returns are negatively correlated with the CGR, if dividend yields and price-earnings ratios are used as proxies for the cost of capital. Most results are robust for endogeneity, with causation running from corporate governance practices to firm fundamentals. Finally, an investment strategy that bought high-CGR firms and shorted low-CGR firms would have earned abnormal returns of around 12 percent on an annual basis during the sample period. We rationalize the empirical evidence with lower agency costs and/or the removal of certain governance malfunctions for the high-CGR firms.
Author: Roderick Martin Publisher: OUP Oxford ISBN: 0191607053 Category : Business & Economics Languages : en Pages : 238
Book Description
The growth of shareholder value has been a major change in Western economies since the 1980s. This growth has reignited debates concerning relations between investors and managers. This book argues that investors are more than passive providers of finance, on whose behalf managers seek to maximize shareholder returns. Instead, many investors directly influence management practice, through investor engagement. The book examines the role of institutional investors and private equity firms, two types of investors with overlapping but different reasons for engagement. Questions addressed include: What are the incentives, and disincentives, for investment engagement? How is investor engagement organized? What areas of management practice are of particular concern to investors? The discussion shows in detail how private equity firms play a major role in developing new companies, beyond the provision of finance, especially in the IT, biotechnology, and pharmaceutical sectors. The discussion is primarily based on British and US research. The debate has wider international relevance, because there are strong pressures for establishing shareholder value as the international 'norm' for systems of corporate governance. Following a detailed discussion of Germany, the authors conclude that there is no inevitable trend to shareholder value: shareholder value depends upon complementary institutional arrangements in national business systems, which are far from universal. The book concludes with a critical analysis of the justifications for shareholder value and investor engagement, highlighting the weaknesses of both efficiency and equity justifications.
Author: Jennie Bai Publisher: ISBN: 9781457835698 Category : Languages : en Pages : 59
Book Description
The finance industry has grown, financial markets have become more liquid, and information technology allows arbitrageurs to trade faster than ever. But have market prices then become more informative? We use stock and bond prices to forecast earnings and find that the information content of market prices has not improved since 1960. We use a model with information acquisition and investment to link financial development, price informativeness, and allocational efficiency. As information costs fall, the predictable component of future earnings should rise and hence improve capital allocation and welfare. We find that this component has remained stable over the past 50 years. When we decompose price informativeness into real price efficiency and forecasting price efficiency, we find that both have remained stable.
Author: Michael Jacobs Publisher: Addison Wesley Publishing Company ISBN: Category : Business & Economics Languages : en Pages : 260
Book Description
"Break the Wall Street Rule explains how you can maximize your stock-market returns by acting as a true owner of the companies whose stock you purchase. In his thorough analysis of today's investment landscape, former Treasury Department official Michael T. Jacobs shows that this "effective owner" approach takes the guesswork out of investing and reinvents the relationship between corporations and shareholders. In contrast, the current Wall Street Rule - to sell stock whenever its performance displeases you - actually undermines your returns." "Most investors speculate on stock prices, either buying and selling or paying mutual funds to buy and sell. Such shuffling produces dismal results compared to the overall market; each year three out of four money managers return less than the market average. The real beneficiaries of the Wall Street Rule are the investment industry and company executives who don't want to answer to owners. Jacobs shows that simply by investing for long-term growth, you can beat 95 percent of mutual funds. Even better, in the last decade companies with large effective-owner shareholders earned triple the market average." "With Break the Wall Street Rule investors of any size can become effective owners. In clear language Jacobs explains how small shareholders can utilize the power of institutional investors. There are guidelines for choosing companies structured for the benefit of their shareholders, not to insulate their executives from shareholders. Other chapters describe how to assemble a portfolio and how to calculate whether a stock has paid you back enough." "Many books explain when to buy stocks or which stocks to buy. Break the Wall Street Rule shows how real gains come from what you do once you own a stock. You can use the power of new SEC proxy rules to maximize your returns. You can ensure that management works for shareholders by supporting directors and resolutions that protect your interests, such as connecting pay to performance. Owning only $1000 of stock lets you propose your own shareholder resolutions; Jacobs illuminates the rules and realities of this process. As shown at Sears and GM, shareholders and boards can affect how major corporations are run. In sum, the effective owner philosophy of Break the Wall Street Rule will revolutionize the way you look at stock-market investing."--BOOK JACKET.Title Summary field provided by Blackwell North America, Inc. All Rights Reserved
Author: Sin-Wing Chan Publisher: ISBN: 9781361023266 Category : Languages : en Pages :
Book Description
This dissertation, "The Impact of Corporate Governance and Strategies on the Performance of Indirect Real Estate: Investors'' Perception and the Reality" by Sin-wing, Chan, 陳善榮, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Indirect real estate (IRE) refers to listed property companies and IRE performance in this empirical research refers to long term share price performance against a portfolio of assets attributable by long term observations of the respective property companies'' corporate governance and strategies. This study investigates three related issue regarding IRE: First, how corporate governance and strategies of IRE affect its share price performance. Second, whether the impact, if any, is consistent with investor''s perceptions. Third whether investors can earn excess return based on public information about the corporate governance and strategies of IRE. The results of this empirical research are of academic and practical importance. First, it tests the validity of prevailing belief amongst academicians and investors that better corporate governance and strategies can enhance market value of IRE thus leading to better share price performance. In particular this study tests the impact of different attributes of corporate governance and strategies of an IRE on its share price performance. The results of this study suggest that property type and geographical diversification has no impact on performance of the IRE. It is found that the impact of the stock of immediately developable land on share price performance is positive but the stock of land that is not readily developable land had no impact. We also find that the percentage of shares held by the board of directors had negative impact on IRE share price performance. These results align with those in many previous studies. Consistent with previous studies, it is found that the consistent dividend policy, separation of Board Chairman from CEO, current asset to current liability ratio, interest coverage ratio, WACC, ROA, ROE, market value to book ratio have significant impact on share price performance. The results show that proportion of income from property has a positive impact on IRE share price performance, which does not support the strategy of diversification to non-real estate business. Second, even though most investors believe that corporate governance and strategies are important determinants of share price performance, there has been very little empirical research on how investors perceive relative importance of different attributes of corporate governance and strategies in terms of their impact on share price performance. Even more importantly, whether investor''s perceptions are consistent with real life facts is unknown. The results of this study suggest that there is no correlation between investors'' perception of the relative importance of different attributes of corporate governance and strategies and their actual impact on share price performance. Finally, the Efficient Market Hypothesis (EMH) predicts that public information cannot be used to earn excess returns. Empirical evidence from this study suggests that public information of corporate governance and strategies has small but significant predictive power on future share price performance even though investors'' perception of the importance of these attributes are not consistent with the reality. This finding casts doubts on the EMH. The empirical findings on the impact of individual attribute of corporate governance and strategies can be used to rectify investors'' subjective bias and assi
Author: Lynn Stout Publisher: Berrett-Koehler Publishers ISBN: 1605098167 Category : Business & Economics Languages : en Pages : 151
Book Description
An in-depth look at the trouble with shareholder value thinking and at better options for models of corporate purpose. Executives, investors, and the business press routinely chant the mantra that corporations are required to “maximize shareholder value.” In this pathbreaking book, renowned corporate expert Lynn Stout debunks the myth that corporate law mandates shareholder primacy. Stout shows how shareholder value thinking endangers not only investors but the rest of us as well, leading managers to focus myopically on short-term earnings; discouraging investment and innovation; harming employees, customers, and communities; and causing companies to indulge in reckless, sociopathic, and irresponsible behaviors. And she looks at new models of corporate purpose that better serve the needs of investors, corporations, and society. “A must-read for managers, directors, and policymakers interested in getting America back in the business of creating real value for the long term.” —Constance E. Bagley, professor, Yale School of Management; president, Academy of Legal Studies in Business; and author of Managers and the Legal Environment and Winning Legally “A compelling call for radically changing the way business is done... The Shareholder Value Myth powerfully demonstrates both the dangers of the shareholder value rule and the falseness of its alleged legal necessity.” —Joel Bakan, professor, The University of British Columbia, and author of the book and film The Corporation “Lynn Stout has a keen mind, a sharp pen, and an unbending sense of fearlessness. Her book is a must-read for anyone interested in understanding the root causes of the current financial calamity.” —Jack Willoughby, senior editor, Barron’s “Lynn Stout offers a new vision of good corporate governance that serves investors, firms, and the American economy.” —Judy Samuelson, executive director, Business and Society Program, The Aspen Institute
Author: Donald H. Chew
Author: Theodore Clark Moorman
Author: Donald H. Chew
Author: Wolfgang Drobetz
Author: Roderick Martin
Author: Jennie Bai
Author: Michael Jacobs
Author: Wolfgang Drobetz
Author: Sin-Wing Chan
Author: Alon Brav
Author: Lynn Stout