- List of Figures
- List of Tables
- Regulation and Comparative Corporate Governance
- The History of Corporate Governance
- Capital Markets and Financial Politics: Preferences and Institutions
- An International Corporate Governance Index
- Boards and Governance: 25 Years of Qualitative Research with Directors of FTSE Companies
- Process Matters: Understanding Board Behavior and Effectiveness
- Board Committees
- The Governance of Director Networks
- Executive Compensation and Corporate Governance: What Do We “Know” and Where Are We Going?
- Corporate Governance: Ownership Interests, Incentives, and Conflicts
- Financial Leverage and Corporate Governance
- Financial Reporting, Disclosure, and Corporate Governance
- Auditing and Corporate Governance
- The Market for Corporate Control
- The Life Cycle of Corporate Governance
- Corporate Governance in High-Tech Firms
- Family Business and Corporate Governance
- Corporate Governance in IPOs
- Corporate Governance, Multinational Firms, and Internationalization
- Corporate Governance in Business Groups
- Governance in Financial Distress and Bankruptcy
- Venture Capital and Corporate Governance
- Private Equity, Leveraged Buyouts, and Corporate Governance
- Hedge Fund Activism and Corporate Governance
- The Financial Role of Sovereign Wealth Funds
- Corporate Governance and Nonprofits: Facing up to Hybridization and Homogenization
- Corporate Governance and Labor
- Corporate Governance and Principal–Principal Conflicts
- Multiple Agency Theory: An Emerging Perspective on Corporate Governance
- An Age of Corporate Governance Failure?: Financialization and its Limits
- Corporate Governance and Corporate Social Responsibility
Abstract and Keywords
This chapter takes a look at the interrelationships between business risk and corporate performance, and their impact on financial reporting behavior, managerial incentives, and the possibility of expensive and unexpected corporate governance failure. It then addresses the argument that unexpected corporate governance failure may become even more probable due to a systematic board loyalty bias that has led to executives being awarded generous compensation packages. The chapter reveals that managers are being excessively rewarded for taking hidden financial risks. It also further notes that these high business and financial risk strategies are usually not consistent with the interests of the shareholders.
Robert N. Watson is Distinguished Professor of English, Associate Dean of Humanities, and holds the Neikirk Chair for Educational Innovation at UCLA. His most recent book, Back to Nature, won the the Dietz prize for the year’s best book in early modern studies and the ASLE prize for the best book of ecocriticism.
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