This paper investigates the relationship between a firm's corporate governance structure and the abnormal returns associated with acquisition announcements. Based on a sample of 294 acquisitions occurring from 1994 through 1998, it is found that acquiring firms have significant two-day abnormal returns of-2.71%. A multiple regression model that includes corporate governance variables has an Adjusted R-squared of 14.2% with board size, the sensitivity of the CEO's wealth to changes in share price, method of payment, and acquiring firm size all being significant explanatory variables.
A new governance structure for publicly issued corporate bonds could overcome the collective action and bonding problems currently linked with public debt. This structure would accomplish this by instituting a new category of bondholder representative, the supertrustee. This supertrustee, unlike the more limited conventional indenture trustee, will be empowered to watch over the company actively and to enforce and renegotiate a bond's covenants on behalf of public bondholders.
This study is focused on Corporate Governance of China's State-Owned Enterprises(SOEs) in which research was studied on the role of SOEs under Corporate Governance of CCP(China Communist Party) organization that has been not studied a lot in previous research. As a result of the case study of Baosteel, though China's SOEs accommodated western corporate governance system, the CCP organization in the corporate has been carried out the role of internal control mechanism which complements weakness of governance structure, and is giving positive influence on governance structure of SOEs as a distinctive character of China's SOEs through performance of political core function.
According to conventional wisdom, a supermajority independent board of directors is the ideal corporate governance structure. Debate nevertheless continues: empirical evidence suggests that independent boards do not improve firm performance. Independence proponents respond that past studies reflect a flawed definition of independence. Remarkably, neither side in the independence debate has looked to Delaware, the preeminent state source for corporate law. Comparing Delaware's notions of independence with those of Sarbanes-Oxley and its attendant reforms reveals two fundamentally different conceptions of independence. There are at least two lessons for corporate reformers. First, the definition of independence should be refined to address the conflict at hand. Second, and more fundamenta...
While the indirect real estate market has been growing in Mainland China, the issue of corporate governance has emerged as a key concern for investors, as a number of cases involving stock manipulation have been revealed in recent years. This study investigates the degree to which corporate governance structures might be affecting the link between direct and indirect real estate in Mainland China. Based on data from 1994 to 2008, it was found that Mainland-listed property companies had a weaker linkage between direct and indirect real estate than Hong Kong-listed property companies. Regulatory reforms in the Mainland stock markets have, however, tended to improve the linkage, as well as selection returns for Mainland-listed companies. These findings suggest that corporate governance str...
Impressed by the quality of Toyota's cars and the efficiency of its plants, American managers began to study that company's production methods, which aimed to eliminate all parts inventories through a more flexible use of machinery and workers. [...] laws designed to bring American corporations more directly under the control of financiers encouraged corporate managers to focus more on making money and less on making quality goods.\n Since then we have seen the process play out in the chemical and metal industries, and in service industries such as information processing and finance. The alternative is to reform the various legal regimes (including trade and corporate governance as well as antitrust) that determine how corporate managers structure the industrial systems on which we de...
The pernicious influence of politics continues to pollute corporate governance applicable to public corporations in the United States. In particular, the political process has yielded a corporate governance regime that simultaneously imposes excessive regulatory costs and impairs investor confidence. CEOs continue to enjoy too much autonomy over the public corporation. Increasingly, empirical evidence shows that corporate governance standards in the U.S. are sub-optimal. This Article proposes to change the legal structure by which corporate governance standards are articulated. Using the Federal Reserve Board as a model, this Article urges the creation of a depoliticized federal agency with authority over an optional federal regime selected by shareholders. As such, corporate governance...
... when they have riskier capital structures, superior shareholder rights, and CEO compensation... capital structure, ownership structure, corporate governance, and CEO compensation. However, this pa...
Although shareholder activism has progressed in recent years, the 2008 financial crisis confirms the need for further changes. The legal structure underpinning contemporary American corporate governance has failed shareholders. While some companies found allowing shareholder access to proxy statements threatening, supporters argued that Rule 14a-8's purpose is not to force change on a company, but to get the attention of its board and senior management, promote dialogue and, when appropriate, conduct a shareholder referendum on issues of concern. The 2008 financial crisis only strengthens the argument for shareholder democracy. Shareholders have long pressed for a greater role in nominating directors, reasoning that a director nominated by investors would analyze issues with investor co...
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