Critics argue that ‘myopic’ activist shareholders, especially activist hedge funds, force corporations to sacrifice long-term profits and competitiveness in order to reap quick short-term benefits. The immediate spike that comes after interventions from these activist shareholders, they argue, inevitably leads to long-term declines in operating performance and shareholder value Three researchers, Lucian Bebchuk of Harvard […]
Read More… from Hedge Fund Activism Can Help, Not Hurt, in the Long Run
The decisions of C-suites and boards are influenced by the previous experiences of their members. In uncertain situations, organizations gain legitimacy — and reduce the costs of experimentation — by copying others. These common-sense principles are borne out in a large body of research that points to the importance of ‘interlocks’ — i.e. previous or current ties to […]
Read More… from The Curse of the Narcissistic CEO
The term ‘human capital’ encompasses the knowledge, skills and talents inherent in individuals. These skills represent an important source of productivity in an organization, and can be enhanced through training and education. But could an individual’s selection from a top educational institution constitute or signal that they will amount to a ‘better’ human capital resource […]
Read More… from Do Ivy League or Elite Educated CEOs Outperform Others?
Long-distance relocation of the whole of a company’s headquarters remains rare. Long-distance relocation of the offices of members of the top management team and of core functions such as finance and R&D, on the other hand, is becoming more common. The phenomenon is most clearly seen in small but highly internationalized economies such as Finland, […]
Read More… from Relocating Leaders Abroad: Pros and Cons
When companies choose their CEO, many opt for those with a proven record of success in their particular industry…nothing surprising there. This is a changing world, with increased burdens on business, the emergence of new markets, constantly-evolving technologies, and a general air of uncertainty about the future. A safe pair of hands at the helm […]
Read More… from Choosing a CEO: Safe Pair of Hands Vs Too Much Experience
While the commonly accepted wisdom is that new CEOs from the outside will be in a better position to bring change to an organization, the record indicates otherwise. They often fail. Ayse Karaevli of the WHU-Otto Beisheim School of Management, and Edward Zajac of Northwestern University’s Kellogg School of Management challenge the conventional wisdom and […]
Read More… from Outsider CEOs and Strategic Change
Have you ever found yourself in the frustrating position of voicing suggestions that for some reason keep going unheard? You are not alone; even the most talented of executives often reach such a stage in their careers where they find themselves short of the power and influence needed to get things done. Such power deficits […]
Read More… from Three Ways to Overcome Your Power Deficit
The concept of governance is certainly not new, but in recent years it has been gaining more attention, especially in the business world. ‘Corporate casualties’ are proof that commercial pressures nudge executives towards introducing irresponsible risk into routine business operations. Today, these risks are easily obscured thanks to technological complexity, the large scales on which […]
Read More… from Bridging Organizational Governance Gaps
In recent years, the trust afforded to senior management has eroded significantly, particularly for those executives in finance-related positions. The demise of certain companies sent shockwaves across industries; successful covering up of the actual financial situation a company was in meant regulators, employees and the general public remained unaware till it was too late. Going […]
Read More… from How to Recognize Managements With Something to Hide
By digitizing many business processes, organizations have begun to automate operations and how they interact with customers and suppliers. As a consequence, more and more aspects of our working lives are taking place in a virtual world—a world defined and shaped by “bits and bytes,” say James Petter (Vice President at EMC) and Joe Peppard […]
Read More… from Big Data = Big Opportunities: If the CEO Takes the Lead
