A number of different incentives can potentially push leaders to make decisions that favour short-term returns over long-term value. To test whether such incentives actually have an impact on decision-making, a team of researchers used market reaction to new project announcements by CEOs. They compared differences in the market response to CEOs who had incentives […]
Read More… from Wrong Incentives Push CEO to Focus on the Short-term
New research into the personal history and decisions of division managers, CEOs and directors of nearly 360 S&P 1500 industrial conglomerates reveals the extent of the gender bias that exists in large corporations, and highlights some of the surprising origins of the bias. Specifically, the in-depth study led to the following findings: 1. CEOs are […]
Read More… from CEOs-Gender-biased Formative Years Has a Negative Economic Impact
Many previous studies have examined how personal benefits or the refusal to exert the required effort (also known as ‘enjoying the quiet life’) can lead managers to take actions that hurt their companies. The recent research by Todd Gormley of Olin and David Matsa of Kellogg focuses on an overlooked third motivation for managers acting […]
Read More… from The Unintended Consequences of Risk Averse Managers
With good governance recognized as a key factor in a company’s success, the recruitment of new members to a board is a highly important and consequential task. New research focuses on the often-overlooked criteria of domain expertise — that is, whether having experts in the sector or industry of the company on the board adds […]
Read More… from In Uncertain Times It’s Best to Have Fewer Industry Experts on a Board
When a corporate scandal erupts, the same questions emerge: What was the board of directors doing? How could it let this happen? Why were directors not doing a better job of monitoring corporate management? Failure in corporate governance is often attributed to board members’ incompetence or lack of incentive. After reviewing nearly 300 academic journal […]
Read More… from Why Boards of Directors Fail at Monitoring Their Companies
How important is corporate culture to the success of a company, and what factors play into developing an effective or ineffective culture? A team of researchers from Duke University’s Fuqua School of Business and Columbia Business School explored these questions through an extensive survey of 1348 CEOs and CFOs, followed up by in-depth interviews with […]
Read More… from Corporate Culture: A Key Drivers of a Firm’s Value
In December of 2005, Norway passed a quota law requiring that women make up a minimum of 40% of corporate boards. Corporations had 2 years to comply with the law. As a result of the law, the fraction of women directors went from 5% in 2001 to 40% in 2008. Opponents of the quota argued […]
Read More… from Quotas to Gender-Balance the Board: Norway’s Drastic Action Worked
Corporate governance systems are the systems through which a company is controlled and directed. Public corporations will have boards of directors responsible for ensuring that management is acting in the best interests of the company. Strategic human resource management (SHRM) is based on the belief that human resource decisions must be aligned with the strategy […]
Read More… from How Corporate Governance Impacts Human Resources
Although the impact of the 2008 recession was nearly unprecedented in its scope and depth, nearly all organizations will inevitably face setbacks and severe challenges. Stable, resilient companies can meet these challenges head-on and not only ‘survive’ but emerge on the other side intact and strong. Companies can make themselves resilience in one of two […]
Read More… from Organizational Resilience Is Reinforced by These Two Variables
Should a board hire a former or current CEO from another company to become the new CEO? In the past, companies tended to promote new CEOs from within, ensuring that the new chief executive had the vital firm-specific experience needed to succeed. Today, however, more boards tend to believe that someone who has successfully navigated […]
Read More… from Why Previous Experience of New CEOs Makes Matters Worse!
