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date: 16 October 2019

(p. 744) (p. 745) Index

(p. 744) (p. 745) Index

AA (Automobile Association)540
Aaronovitch, S.204–5
Abbott, L. J.179, 180, 182, 184
ABC (Agricultural Bank of China)596, 538
Abdolmohammadi, M.316
ABF (Associated British Foods)261
ABI (Association of British Insurers)37
abnormal returns128, 547
hedge funds aim for567
long-term570
positive566, 570
absorptive capacity373, 453
Abu Dhabi Investment Authority593, 602 n.(3)
academic journals1
access to capital137
accountability11, 164, 380, 623, 625, 720
board4, 167, 192
declining357
diversity and619
early-stage IPO with substantial tradeoffof356
electoral24, 25
enhanced levels of310
executive lack of57
financial622
financial, extending compliance for609
formalized320
horizontal614
implications for609
limited and high levels of354
managerial46, 47, 49, 59, 99, 356, 366, 393
ownership and612–17
public312, 608
Accountancy Age286 n.(9)
accounting6, 234, 246, 301, 675
assessment of principles311
conventions which shape performance measures650
direct/indirect costs of reports294
disclosure of information300
dubious practices709
early data studies in US548
fair value15, 323
management generally adept at exploiting rules277
manipulation of numbers38
misreporting649
performance measures274
quality in private firms301
regulation of303 n.(2) see also AICPA; GAAP; IFAC
accounting standards28, 109, 301
cross-country differences in530
regulating57 see also FASB; IASB
Acemoglu, D.75, 92 n.(11)
Acharya, V.549–50, 685
acquisitions, see M&As; takeovers
Actelion Ltd259
adaptation617–20
ADBC (Agricultural Development Bank of China)596
added-value402, 429, 434, 436, 451, 545, 616
high, difficult to develop646
Adler, B. E.492, 500, 507
Adler, N. J.452
Adler, P. S.389, 406, 407
adverse selection293, 422, 531
agency costs associated with436, 439
investors can mitigate435
reducing the extent of423
Aeon Co258
affiliate directors403, 404
positive effect on diversification strategies405
affiliation rights strategy103, 112–13, 119
(p. 746) AFL-CIO (American Federation of Labor and Congress of Industrial Organizations)83
agency cost theory51, 55
agency costs25–6, 32–3, 38, 69, 70, 79, 422, 437, 531
accentuated359
adverse selection436, 439
associated with high free cash flows and low growth prospects336
debt-financed LBO addresses542
deficiencies in legal and labor market institutions466
high650
higher335
horizontal368
information asymmetries increase290
inherent311
mitigated534 n.(3)
more problematic370
potential423
reduction in300, 319, 328, 337, 370, 377, 378, 439
substantial, for external investors366
two types faced by minority shareholders35
agency problems55, 101, 102, 272
basic98
central273
classic311
corporate constituents99
critical359
domination of360
executive compensation seriously limited as solution to374
increase of422
key ingredient in attenuating553
less efficient mechanism to alleviate374
local implementers have more451
major types of123
may be different in different national settings440
mechanism that may reduce the amount of monitoring and incentives needed to resolve408
mitigation of316, 333, 452
much less pronounced312
new and sometimes unexpected12
owner-owner396
potential112, 119, 301, 683
principal-principal437, 482
private equity syndicates may create their own439
reducing risks of423
risk-averse managers and risk-seeking equity holders492
secondary310
severe103, 185, 482
studies focused on711
substantial103
two distinctive types of422
well-known, partial solution to310 see also principal-agent problems
agency theory12, 17, 18, 55, 135, 151, 165, 172, 179, 207, 247, 255, 273, 351, 368, 369, 375, 378, 379, 392, 393, 395, 406, 410, 412, 541, 543, 663, 726
applied to understand managerial perceptions457
classic180, 544
coverage downplayed389–90
evidence to support in monitoring610
explicit test of185
limited evidence to support163
more complete description of413 n.(4)
multiple458–9, 660, 673–702
organizational theorists have increasingly drawn on421
principal-principal675
significant weakness of258
used to predict superior and inferior performance by family blockholders396
Agenda 2010 (Germany)90
agent-owners674
conflict between675–8
cooperation among694–5
multiple, managerial processes to deal with695–6
potential conflicts and ramifications caused by12
short-term691
Aggarwal, R. K.231, 233, 239, 302, 423
aggregate demand275
aggregations67, 81, 84–8, 360
(p. 747) Aghion, P.367, 368, 370, 491
Aglietta, M.706
Agrawal, A.205, 248, 280
agriculture75
Aguilera, R. V.2, 17, 24, 26, 30, 31, 32, 36, 37, 38, 163, 171, 439, 441, 449, 666, 667–8, 720, 721–2
Aharoni, Y.455, 457
Ahmad, A. C.404
Ahrens, T.142, 164
AICPA (US Institute of Certified Public Accountants)310–11, 318 see also PCAOB
AIFM (EU Alternative Investment Fund Management) Directive14–15, 296
AIG (American International Group)13
AIMR (US Association for Investment Management and Research)298
airline industry238
Akerlof, G.285 n.(5)
Alesina, A.92 n.(7/13)
Alexander, A.206
Ali, A.303 n.(1)
ALI (American Law Institute)36, 49, 52, 55
Tentative Draft No. 1 (1982)50, 51
alignment approach247, 248
alignment of interest248, 299
Allcock, D.7, 433, 691, 695
Alliance Boots540
allocation of capital, see capital allocation
allocation of resources, see resource allocation
Alloy, Inc.568
Almeida, H.468, 476
Altman, E. I.494
Alves, C.38
American Assembly (think-tank)49, 54
American Bar Association49, 80
American Civil War (1861–5)80
American Express53
American federalism85–7
Amess, Kevin10
Amess, K.550, 551
Amihud, Y.293
Amit, R.390, 397, 430
Amran, N. A.404
analysts84, 87, 231, 262, 290–1, 298, 303 n.(1)
absolute price impact of information disseminated by297
better communication with341
economics-oriented91
negative reports by696
analytics141
Andersen, see Arthur Andersen
Anderson, R. C.389, 391, 396, 397, 400, 403–4, 731
Andrade, G.492–3, 554, 555
Andres, C.547
Andrews, K. R.50
angels259, 356, 435
Anginer, D.507
Anglo-centrism361
anti-takeover mechanisms6, 53, 108, 340–1, 379
effects of provisions230
strong laws/legislation83, 86, 649–50
antitrust204, 342
anti-dilution rights523
APB (UK Auditing Practices Board)318, 322
Apple429
appointment rights strategy103–4, 110–11
APR (absolute priority rule)493, 500
violations575
Arab Gulf countries583 see also Abu Dhabi; Kuwait; Qatar; UAE
arbitrage254
Argentina638
Armour, J.90
Arora, P.730, 736
Arrighi, G.712
Arthur Andersen137, 295, 316
Arthurs, J. D.12, 428, 436, 458–9, 660, 674, 675, 679, 690, 691, 696
Ashton, Richard210, 211
Asian countries404, 547, 640, 667, 722
negative effect of family ownership397 see also Brunei; East Asia; Indonesia; Malaysia; Philippines; Singapore; Taiwan
Asian Financial Crisis (1997)58, 596
Asian stock exchanges298
asset flipping540
asset management companies597
asset specificity378
asset-stripping13, 14, 358, 540
state477
(p. 748) asset substitution493, 495
asset-turnover ratio275
asset values300
heterogeneity of beliefs about353
Astrachan, J. H.392
Atanasov, V.594
AT&T202
auctions338, 340, 491, 503, 507, 508 n.(11)
mandatory500–1, 506
optimal503 n.(13)
audit committees177, 178, 179–82, 228, 400
ceremonial interpretations/functions of184, 185
chair of109, 149
family firms less likely to establish401
family members on boards weakens effectiveness of404
importance of informal processes related to185
influence on internal control activities183–4
investor perceptions regarding183
listed companies required to have318
overlapping of compensation committee and190
role of303 n.(2)
auditing4, 181–2, 137, 190, 308–27
analyzed as powerful model of governance6
confidence in295
government-sponsored schemes725
high quality301
internal6, 181, 185, 191
nonprofit systems624
plethora of regulations273 see also external audit; internal auditing; ISA; US-American Center
Auditing Practices Committee (UK)315
Australia534 n.(2), 544, 547
CEO cash compensation236
Austria353, 356, 530 see also Schumpeter
auto bankruptcies506–7
Avon Rubber144
Axelson, U.553
Ayotte, K. M.8, 499, 500, 503, 504, 506, 572
Babenko, I.234
Bach, D.620, 622
Backer, T. E.611
Bacon, N.551
Baek, H. Y.298, 299
Baek, J.-S.476, 482
bailout loans507
Bainbridge, S. M.50, 51, 246
Balakrishnan, S.376
Balcik, B .616
Balding, C.584
Balkin, D. B.375
Ball, R.301
Bammens, Y.389, 395, 398, 400, 413 n.(5)
Banesto58
Bank Holding Company Act (US 1956/2012)81, 508 n.(5)
bank lenders:
important governance mechanism for497
management departures are initiated by497
role when firms are auctioned500
Bank of America201
Bank of Communications (China)599
Bank of England138, 201
banking collapse (2008)141
banking crisis (1933)71
bankruptcy12, 33, 47, 124, 269, 495–8, 502, 508 nn.(813), 541
better governance of target pre-PTP associated with lower risk548
bringing dynamic changes to the process564
debt-equity swap helps avoid554
failure to fulfill debt obligation can lead to543
formal and informal control rights in9, 494
hedge fund participation in578
made very costly375
managerial turnover in and around489, 490, 494
multiple agency theory in675, 687–90, 693–4, 697 n.
national113
senior lender control rights499–501
(p. 749) typical firm declaring687 see also auto bankruptcies; US Bankruptcy Code; also under following entries prefixed “bankruptcy”
bankruptcy courts490, 492, 505, 688
measure of effectiveness504 see also US Bankruptcy Court
bankruptcy law113, 490, 503, 506, 507, 688, 689
creditors’ rights272
new wave of reforms122
reorganized legislation121
bankruptcy reorganization490, 491, 493–5, 498–507, 508 nn.(11/13), 689
hedge fund participation in572, 573, 578, 575
legislation121
Banks, T. L. & F. Z.228
banks67–8, 139, 204, 254, 489
Chinese reform595–9
DIP financing574
director networks in205
distressed firm501
driven by financial regulations and regulatory policy501
Europe82
forgiveness of principal on loans498
incentivized to recover debt358
information acquired about PE firm from prior transactions550
interlocks between firms and207
international mega-banks201
joint-equity598
law that reduced the power of34
loan concentration501
nation-spanning, with significant stock ownership81
normally more risk averse370
private information flows between firms and294
recapitalizations597, 598, 599
reorganization of583, 599
reports of301
roles of498, 713
significant ownership by332
softinformation between borrower and294
state-owned582, 595–6, 598, 599
stock market capitalism vs71
substantial involvement in company financing639 see also central banks; commercial banks; development banks; investment banks
Barbary, V.587
Barings Bank137, 309
Barnard, C.145
Barnard, J. W.279, 281
Barnea, A.208, 735
Baron, J.429
Barry, C. B.292, 434
Barth, M.300
Bartholomew, S.452
Bartlett, C. A.450, 453
Baruch, F.204, 205
Bascha, A.528, 529
Bass brothers53
Battaggion, M. R.368
Baudrillard, J.710
Baysinger, B.208, 259, 370, 372, 376, 380, 469
BB Biotech AG259
BCCI (Bank of Credit and Commerce International)309
Beamon, B. M.616
Bear, S.730
Beasley, M. S.178, 181, 182, 184
Beattie, V.183
Beatty, R. P.374, 421, 429, 430, 432
Bebchuk, L. A.37, 72, 92 n.(3), 93 n.(19), 98, 101, 223, 293, 723
Becht, M.57, 99, 100, 102
Becker, B.495
Bédard, J.177, 178, 179, 180, 181, 184, 192
Bednar, M. K.168, 170, 246, 260, 262, 263, 696
Beekes, W.142
Beesley, M.202
Belgium312, 402, 530, 612
Bender, R.187, 351
Benito, G. R. G.456
Benito, M.186
Benson, L.78
Berent, M. M.391
Berent-Braun, M. M.393, 408, 410
Berger, P. G.234, 474
Bergh, D. D.247
(p. 750) Berglöf, E.58, 470, 471, 474, 477, 479
Berle, A.6, 25, 51, 52, 92 n., 99, 328, 330, 430, 719
Berlin Wall (1989)136
Berrone, P.235, 398, 736
Berry, R. H.353
Bertelsmann Foundation611
Bertoni, Fabio7, 376
Bertrand and Mullainathan649
best practice11, 31, 36, 57, 138, 179, 187, 313, 331, 404, 405, 411, 617, 623, 624
new333
regulation and codes of203
Betker, B. L.493
Beuselinck, Christof6, 311
Beyer, A.291, 293, 297
“bezzling”710
Bharath, S. T.493, 500
Bhaumik, S. K.456
bid-ask spread293
Biddle, Nicholas80
Big Four auditing firms319
biotechnology industry259, 294, 707
Birkinshaw, J. M.451
Bishop, K.433, 438
Bjørnåli, E. S.373
Black, B.647, 650, 651
Black, B. S.52, 53, 54, 434, 438, 440, 529, 565, 576, 577
Black, F.492
Black, J.620
BlackBerry pinging140
Blackburn, R.710, 715
Blackwater713
Blair, M.636, 650
Blair, Tony89
Blankespoor, E.303
Blaylock, B.507
blockholders252–3, 259, 262, 357, 695
additional challenges592
concentrated ownership by639
controlling, opportunistic principals as368
family396
incumbent101
individual252
institutional696
institutional696
large, bargaining power of368
legally constrained26
monitoring of108
multiple667, 668
ownership by298
preferences of261
strong119, 123 see also large blockholders
blue-chips204
Blumentritt, T.405
BM&FBovespa38
board committees37, 177–99, 224–5
CSR731
environmental731
board composition104, 350, 352, 400, 421, 720, 726
particular care should be taken in designing373
performance and428–9
resolving mixed evidence on CSR and730
various predictors of402
world's largest multinational firms453
board independence223–4, 299, 332, 428–9, 430
adopting a stringent definition of404
externally visible dimensions of696
positive relationship between environmental performance and726
board-investor relationships139
board members248, 260, 281, 374
ability to keep management accountable for its decisions366
affiliate409
allies as263
employment ceases in regular merger681
exclusion of labor representatives by641–2
family-related409
female730
independent270, 279, 280, 285
inside, advantage in dealing with uncertainty372
legal responsibilities285
loyalty biases285
(p. 751) multiple directorships692
need to pay attention to compensation and reward434
non-executive438
non-family firms more likely to use formal criteria for selection402
outside372–3, 409, 456, 696
part-time270
responsible for appointment of CEO286 n.(12)
type of compensation received by373
ways of eliminating261
women189
board performance4, 147, 168, 169, 170, 189, 428–9
board power5, 164, 166
qualitative studies on exercise of4
relationship to organizational effectiveness165
board size164, 212, 400–1, 544
negatively associated with firm value for non-family firms404
negatively related to firm's growth opportunities372
positively related to FDI456
board structures720
one- and two-tier108–9, 149
optimal337–8
BoardEx144
boards of directors32, 135–62, 200, 248, 269, 332, 367, 372–4, 410–11, 459, 466, 568
acquiescent271
adjusting564
adoption of accountability practices619
behavior and effectiveness163–76
broad-based view of responsibilities16
central preoccupation with the action of609
CEO relations with164
changes in7
characteristics and performance of IPOs428
coalition among managers and479
companies traded on NYSE189
complementarity of skills between management team and373
conduct of145–7
confronting self-serving managerial initiatives271
CSR and725–31
decision processes279–82
dependence of373
differences in structure332
effectiveness of262, 279–83
employee representation104, 109, 639, 641–2
family businesses389
family members on401
female representation on730
FFB402
fiduciary obligations493
founders and429–30
functioning of38, 50
good/bad decisions and share price331
hedge funds have the potential to influence567
independent433, 548
insider-dominated405
issues facing142
legal responsibilities of273
loyalty biases279–83
mandatory minority shareholder representation111
merger target681
monitoring169, 185–6, 225
monitoring function of393
number of legal experts present on730
optimal structures337–8
power struggle between CEO and205
professionalization of431
quality and experience of353
racial and ethnic minorities on619
roles of4, 145–9, 165, 373, 495–6, 608
shareholder right to nominate candidates48
staggered37, 223, 474
strong225
structure of452
subgroups of190
target692
time of change for434
turnover extremely high489
two-tier structure377
unitary organizations614
(p. 752) urging to remove underperforming chief executives53
value-creating potential of373
values of258
vulture investors join501
weak541
women on624, 730 see also interlocking directorates; also entries above prefixed “board”
BOC (Bank of China)596, 598, 599
Boeker, W.680
Boivie, S.440
Boix, C.75
Bolton, P.108
bond markets507
bonding mechanisms247, 248, 252, 259
bonuses214, 227, 232, 234, 237, 247, 286 n.(8), 455, 566
annual282, 431
bid to maximize the value of239
cash283, 649
compensation structure that focuses on237
increased687
linked to reported corporate profits276
multi-million dollar13
risk adjustment factor in determining284
taxed13
top managers454
book-building functions359
Boone, A.337, 338, 339
Boot, A.294
Booth, J.421
bootstrapping hypothesis128
Boozang, K.609
Borisova, G.581, 602 n.(1)
Bortolotti, B.581, 584, 587, 594, 601, 602 n.(2)
Boss, David S.5
Boston Associates201
Botosan, Christine A.303 n.(1)
Boucly, Q.548, 550
bounded rationality457
Bower, J. L.450
Boyacigiller, N.451
Boyd, B. K.164, 172, 229, 231, 234, 235
Boyer, R.705, 706, 713, 714
Boyson, N. M.569, 570–1
BP Amoco201
BP oil spill (Gulf of Mexico 2010)12–13, 15
Bradshaw, P.617–18
Brammer, Stephen J.12
Brandeis, Louis D.200, 290
Brandes, P.5, 227, 240, 248
Brav, A.421, 435, 566, 568, 569, 570–1, 592
Brazil89
Brazilian Stock Exchange38
BRC (NYSE Blue Ribbon Committee 1999)180, 181
breakthrough rule110, 112
Bremer Vulkan58
Brennan, M. J.421
Brickley, J. A.254
Bris, A.505
Britain, see United Kingdom
British Land577
British Midland metal industries202
Brock, D. M.611
Broughman (2010)374
Brown, A. D.137
Brown, P.142
Brown, R.214
Brown, S. J.292
Bruining, H.376, 549
Brunei583
Brunello, G.405
Brussels Stock Exchange296
Bruton, G. D.422, 423, 441, 660, 678
Buchholtz, A. K.720
Buckley, P. J.455, 456–7
Buffett, Warren229
Bulgaria116
Burke, T. H.619
Burris, V.205
Burt, R.205
Busenitz, L.440
Bushee, B. J.246, 254, 260, 261, 292, 297, 304, 675, 676, 695, 731
Bushman, R. M.231, 292, 296, 299
business coordination378
business elites83
core owner467, 468
interests of74–6
masses vs69
(p. 753) business groups253, 465–88
family-controlled; see family business
internal capital markets in368
large8 see also group affiliates
business risk270, 272, 274, 278
corporate equity insufficient to absorb273
diminished357
excessive276
high5, 275, 276, 355
ignoring of277
Business Roundtable49, 50, 80, 83
Business Sector Advisory Group on Corporate Governance58
Butler, H.208
buybacks530, 645
buyouts645
large private-equity-backed648 see also IBOs; LBOs; MBOs; PTPs
Byrd, J. W.238
Byrne, D.191
Cadbury Report (FRC 1992)1, 26, 36, 38, 57, 137, 138, 142, 177, 180, 282, 287 n.(14), 291, 295, 303 n.(2), 331, 380, 393, 608
Cadman, B.225, 232, 236, 237
Cai, J. I. E.230
Calcagno, R.99
Callen, J. L.612
Calpers (California Public Employees Retirement System)53, 54, 59
Calpine564
Cambridge hi-tech cluster206
Camm, G.149, 151
Canada404
CEO compensation236
leading health nonprofit618
most prevalent form of controlling shareholders390
public corporations184
securities regulations234
venture capital526, 527, 528, 529
Cannella, A. A.135, 142, 151
capital adequacy501, 599
capital allocation356
capital allocation accurate292
efficient292, 296
inefficient100
parallel mechanisms357
scarce296
capital controls26
capital expenditures526
decline following covenant violation497
reductions in549, 571
unusually risky493
capital gains515, 517–18
realization of521, 522
taxation527
capital market development88, 313, 367
investor protection and369, 377–8
PP conflicts negatively affect662
capital markets38, 312
controlling shareholders vs72
demand for information in302
effectiveness of3
financial politics and65–96
global310–11
institutional factors influence innovation activity377
internal357, 368
investor confidence in297, 310–11
liberalization of58
liquidity of311, 378
managerial333
managers vs72
mutual funds dominant in37
political economy of3
public trust in310–11
social democracy vs69–70
strong66, 67, 82
transparent and truthful information important for proper functioning of291
weak66, 87–8
well-functioning378
worldwide291
capital rationing377
capital structure367, 375–6, 491, 494, 498, 499
optimal492
reorganizing502–3, 506
capitalism:
bank-oriented82, 92 n.(16)
characterized711
contemporary712
(p. 754) cooperative and coordinated form of652
financialized711
interactions between politics and66
managerial12, 716
political institutions must support3
political problem of91
present-day, finance is “leading actor” in704
rentier711
state-directed637
Carapeto, M.508 n.(7)
Carcello, J. V.179, 183, 313
Carchon, S.402
career concerns370
Carlin, W.377
Carney, M.395, 399, 407, 473, 476, 482
Carpenter, M. A.208, 230, 428, 452, 453, 458
Carpenter, V. L.178
Carrington, P.208
Carroll, T. M.54
Carter, Jimmy48
Carter, M. E.235, 236
Carver, J.618
Casey, A.503 n.(13)
cash flow112, 233, 293, 350
better performance498
control rights and468, 473, 474, 516, 522, 529, 532–4, 665
declining353
distribution of351
forecasts issued by management in disclosure495
free329, 335–6, 376, 541, 542, 548, 569, 571, 645
future541, 542
keeping state rights469
negative351, 357, 358
strongly positive357
Casson, M.455
Catherine, D.373
causality207, 208, 216–17, 369, 723
negative77
Cawdron, Peter203
CBS681
CCB (China Construction Bank)596
CDB (China Development Bank)591, 596
CE (corporate entrepreneurship)350, 353–4, 357, 359
dominant features and roles of358, 361
increases in549
ownership by long-term investors positively related to675–6
Central and Eastern Europe88, 102, 116
redrawing state boundaries136
central banks80, 595
Central Huijin583, 594–5, 597–8, 599–600, 601
centrality measures209, 213, 215
direct211, 213, 214
indirect211, 214
CEO-board relations164
CEO pay/compensation1, 54, 185, 186, 449, 568–9, 667
average decline570
base salary237, 431
based in large part on stock prices233
benchmarks for235
board interlocks and207
cash236, 237, 238
compensation committees bend GAAP to preserve233
effects of remuneration committee on earnings187
equity-based401
family401, 402
firm performance and238–9
firm size cited as important predictor of232
high229, 236
increased216, 223, 230, 236, 282
large and inefficient216
long-term452, 458
more contingent on performance239
ownership concentration can lower227
ratios to lower-level employees237
salary cut571
short-term375
variation in236
CEO tenure229–30, 398
comparatively long610
family/non-family398
(p. 755) CEO turnover338, 497, 500, 502, 575
low593
CEOs (chief executive officers)5, 148, 165, 169, 181, 188
appointment of286 n.(12), 550
appointment of friends as outside directors207
assessing the performance of189
award-winning230
bankrupt firm, income losses to491
better connected208
board members responsible for appointment of
chairmen and109, 145, 146, 332, 400, 404, 430
characteristics232
connections may be a disincentive to monitor373
dominant614
duality of37, 170, 172, 186, 451, 544
family233, 401, 664, 665
founder397, 423, 430, 433
fraudulent614
hedge fund activism not kind to570
impression management used by260
incentives for393
incumbent regaining full-time employment494
ingratiation tactics to achieve board membership260
less willing to take risks457
loss of control of the firm upon filing for bankruptcy491
loyalty to280–1
major corporation49
majority owner401
multinational firms influence characteristics of453
network used to extend power of211
overlap with ownership405
plausible614
poorly performing239
portfolio company374
power counterbalanced433
power struggle between board and205
powerful189, 205, 207, 238
probability of rehiring by restructured firm491–2
productivity differences230
reduced scope of authority from original position529
retirement income232
right to replace founding entrepreneur as531
shareholding by456
significant replacement of550
strong preference for particular candidates190
stronger control relative to shareholders649
talent among236
target681, 692
top230
typical US base salary431
underperforming53, 405
unstudied reasons for supporting M&As230
venture capitalists’ interaction with374
vulture501 see also entries above prefixed “CEO”
ceremonial function/role178, 184, 185, 192
certification hypothesis434–6
Certo, S. T.421, 422, 428, 429, 432, 678
CFOs (chief finance officers)181
significant replacement of550
Chadha, S.280
chaebols465, 468, 476, 478
Chahine, S.423, 436, 440
chairmen CEOs and109, 145, 146, 332, 400, 404, 430, 544
desirability of separating roles of chief executive and726
subcommittee149–51
vulture501
Chambers of Commerce80, 83
Chandler, A. D.12, 351, 704, 716
Chandler, R. A.313, 315
Chaney, P. K.352
Chang, T.505, 508 n.(10)
charities607, 613, 620, 621, 622
effective621
Charity Commission of England and Wales621
Strategic Plan (2012–15)622
(p. 756) Chatterjee, S.508 n.(7)
Chau, G.401
checks and balances636, 637, 709
Cheffins, Brian R.2, 2, 37, 47, 51, 57, 59
Chemmanur, T.371
Chen, C. J.404
Chen, E. T.404, 410
Chen, M. A.239
Chen, S.298, 299
Chen Xing8
Chen, Y. Y.663
Cheng, Q.238, 239
Cheng, S.230, 232, 233
Chevron Texaco201
Chexim (Export-Import Bank of China)596, 600
Chhaochharia, V.224–7
Child, J.684, 693
child labor642
Chile139, 476
China10, 88, 258, 369, 594–600, 637
business groups253, 465, 470, 472, 473, 476, 477, 479
cross-border M&As663
decision to expand into456
effects of ownership concentration on executive compensation664
firms controlled through pyramidal layers469
flooding of western markets709
foreign-owned subsidiaries in454
private blockholders667
shares concentrated in the hands of three largest shareholders468 see also ABC; ADBC; BOC; CCB; CDB; Central Huijin; Chexim; CIC; ICBC; PBOC; Shanghai
Cho, M. H.369, 374
Choi, J.-H.312
Chow, C. W.319
Chrisman, J. J.389, 392, 400, 405, 408, 413 n.(5), 545
Chrysler503, 506–7
Chua, J. H.396, 405
Chung, C. N.472, 482, 483
Chung, K. H.376
CIC (China Investment Corporation)587, 591, 593
Regulator621
CII (US Council of Institutional Investors)53, 217 n.
Focus List695
Citicorp681
Citigroup201
Citron, D.534 n.(3), 546, 555
City of Glasgow Bank313
City of London37, 138, 139
building communication channels with institutions360
significant effect on137 see also London Stock Exchange
civil law29, 377, 519, 640
Clapman, P. C.47
Clarysse, B.373
class30, 78 see also middle class
class conflict30
clawbacks520, 521
Clay, Henry80
Clayton Act (US 1914)200, 201–2, 204
Clifford, C.570
Clinton presidency90
Coakley, J.436
coalitions66, 76, 87
banker-labor82
capital-market-affecting82
dominant84
implicit81
managerial-labor83
middle-poor85
more complex75
multiple possible83
national85, 90
politically dominant75
redistributive84, 85
sectoral30
shifting82–4
transparency30
Coase, R.97
Coburn, J.608
Cochran, P. L.55, 207
codetermination29–30, 32, 81, 100, 104, 639, 641
removal of positive economic effects642
(p. 757) Coffee, J. C.54, 92 n.(6), 311, 312, 313, 317, 319, 320
Coffey, B. S.730, 731
cognitive conflict169, 170, 171
Cohen, A.98, 101
Cohen, J.182, 184, 191
Coles, J. L.337
collateral375, 497, 688
cash500
right to pull113
seizing490
collective bargaining637, 651
pay fixing via651
collective enforcement mechanism479
Collin, S.-O.465, 472, 482
Collins, D. W.223, 227, 236
collusion471, 480, 796
director networks and204–5
Colombo, M. G.7, 380
Columbia University49
Colville, I. D.147, 154
Combined Code of Corporate Practice (UK)137, 148, 189, 282, 283, 360, 544 see also Corporate Governance Code
commercial banks508 n.(5), 581, 595
city598
large597
commercialization371
Commissioner of Tax Exempt and Government Entities (US)621
committed capital515, 519, 520
Committee on Corporate Governance, see Hampel Report
committees:
anti-fraud109
bankruptcy496
creditor564
equity490
equity564
shareholder493
unsecured creditor490, 575 see also board committees; subcommittees
common law28–9, 377, 519, 640
communist-bloc countries (former)116, 120, 121, 125
communist parties88, 477, 637
Companies Act (UK 2006)138, 636
Company Law273
comparative advantage284, 434, 647
comparative disadvantage372
compensation9, 234, 440
basis for setting5
benchmarks for235
cash230, 232, 233, 236, 238, 432
contentious issue of13
depends primarily on performance566
entrepreneurial incentive527
equity-based53, 214, 239, 378
extra206
high479
incentive-based451
indexing238
influence on performance of multinational firms453
institutional investor521
link is weaker between performance and582
linking to firm performance374
long-term230
more aligned with shareholder interests after M&As232
more likely based on incentives452
non-equity223
performance-based566
relating cash flow measures to233
role of debt in234
stock option223, 235
type received by board members373
variability of231
VC arrangements520
visible incentive70
weighted230 see also executive compensation; managerial compensation; also under following entries prefixed “compensation”
compensation committees48, 237, 240, 282
CEO labor markets and235
composition of185, 186
GAAP bent to preserve CEO compensation233
managerial capture of185
overlapping of audit committee and190
presence of significant shareholders on185
(p. 758) compensation mix431–2
compensation packages:
major mistake in design of374–5
typical282
various aspects of400
competition policy342, 351
competitive advantage253, 543
managerial firm as basis for351
competitive strategies247
competitiveness359, 455, 685, 688
international646
reduced294, 662
complementarities18, 646, 694, 713
institutional30
compliance36, 37–8, 138, 311, 313, 316, 320, 357, 622, 725
legal and regulatory314
nonprofits609, 612
ritualistic310, 321
standard of14
testing315
comply-or-explain principle26, 36, 37, 38, 110, 138, 322
computer software141
conflicts of interest99, 108, 368, 570, 577, 619, 636
anxieties amongst labor representatives641–2
avoiding138
incremental market-based responses can mitigate359
many institutional investors face566
outsiders with188
potential247, 566, 578, 660
shareholders and managers658
conglomerates58, 159 n.(4)
internal capital markets in368
state-owned, full control of600
Connelly, B. L.5, 247, 248, 252, 253, 262, 456, 613, 676, 697
consequences78, 238–9, 273
contextually bounded26–7, 32
deleterious593
disastrous595
distributional, important30
inevitable277
intended5
performance663
positive5
potentially undesirable342
PP conflicts662
separation of ownership and control6, 330
unintended32, 239–40
wage and employment, LBOs551
Considine, M.612
contingency theory617, 618, 623
contractual governance393, 395, 400, 403, 405, 407, 516–19, 522–6
and family effects in privately-held firms401–2
non-contractual vs531–4
relationship between relational and408, 409, 411, 412
control of controls310
control rights293, 490, 516, 531
adopting more550
allocation of496, 530
cash-flow rights and468, 473, 474, 516, 522, 529, 532, 533, 534, 665
concentrated468
dispersed468
equity491, 492, 493
family ties allow founding family toabuse479
formal and informal9, 489, 494
high level of476
limited503
most effective523
senior lender499–501
various ways in which exercised634
controlling shareholders11, 34–5, 290, 294, 475, 476, 598, 658, 669
aligning the interests of478, 480
capital markets vs72
coalitions to take actions against667
(p. 759) conflicts between managers and478, 479, 660
family390, 476
government as663
identity of664, 668
incentives of659, 667
independence of directors from111–12
intangible private benefits662
maximizing own interests480
opportunistic behavior of665
ownership and control concentrated in661
private benefits of control293, 659
strong economic incentive to diversify663
tunneling by472–3
typically considered root cause of PP conflicts666
Conyon, M. J.180, 185, 186, 216, 238, 648
Cooke, T. E.299, 303 n.(1), 398
Coombe, John210
coordinated market economies, see Germany; Japan
coordination costs372
coordination problems108, 501
multiple lenders555
small shareholders99
coparcenary principle668
Core, J.208
Cornelli, F.544, 549–50
Cornforth, C.608, 610, 614, 617
corporate control market, see market for corporate control
Corporate Director's Guidebook49
Corporate Flexibility Act (California 2012)621
corporate governance:
auditing and308–27
boards and135–62
business groups465–88
comparative23–45
corporate control market and331–4
corporate social responsibility and1, 12, 719–44
database of102
director networks206–9
disclosure and6, 298–300
emerging perspective on673–702
evolution of regimes100–2
executive compensation and222–45
failures5, 703–18
family business and389–420
financial distress and bankruptcy489–512
financial leverage and269–89
financial reporting, disclosure and290–308
hard and soft law in35–8
hedge fund activism and564–80
high-tech firms365–88
history of2–3, 46–64
important dimension of5
insider model in liberal market economies30
institutional shareholders “find”52–4
international index97–131
internationalization56–8, 449–64
IPOs421–48
labor and11, 634–57
life-cycle of6–9, 349–64, 366
multinational firms and449–64
multiple agency theory and673–702
national institutions and17–18
new financial landscape12–15
nonprofits and11, 607–33
ownership interests, incentives and conflicts246–68
PP conflicts and11, 658–72
private equity, leveraged buyouts and539–63
reduced confidence in quality of1
reform of50–2
regulation of2–3, 23–45, 99–110, 234–5
risk management and15–17
strategy and stakeholders10–12
Corporate Governance Code (UK)203
corporate strategy233–4
corporatism76, 84, 87 see also Germany; Japan; Netherlands
CORPRO (panel of lawyers)51
(p. 760) corruption253, 436
large-scale710
made possible709
systemic709
cost of capital100, 295, 304 n.(4)
bidder's concerns about128
decreased378
directly influenced293
higher300
increasing368, 377
lower377
reduced293
courts8, 50, 53, 73, 113
commercial70
last resort338
effectiveness of114
covenants520, 529–31
flexibility in application of546
less common518
looser553
restrictive492, 497, 500, 516–17, 519
risk of breaching515
stringent500
violated493, 497, 499, 500
Cox, J.492
Cox, P.676, 735
Craighead, J. A.234, 237
cramdown plan490, 493
creative destruction353, 358, 359
credit facilities499
Credit Lyonnais v Pathe Communications (Delaware 1991)495, 507 n.(2)
credit markets714
creditor control504, 506
prevalence of507
creditor rights protection120–2, 301
regulatory provisions aimed at113
creditors270, 273, 492, 493, 496, 542
agency problems between shareholders and98
attempt by owners to defraud286 n.(7)
conflicts between interests of equity holders and489
debt-financing risks to272
duty to495
junior491, 495, 501–3, 555, 576
key resource providers for the firm.690
major574
outside272
oversecured506
potential conflict between hedge fund shareholders and565
secured506, 508 n.(10), 555
secured688
senior9, 490, 491, 494, 496–501
strengthening of rights in bankruptcy572
subordinated555
substitute mechanisms to protect490
unsecured508 n.(9), 573–4, 575, 688
creditors-turn-shareholders strategy574, 575
Crespi, R.99
Cressy, R.548, 550
critical vendors504, 507, 508 n.(9)
Croatia116
Croce, Annalisa7
Cronqvist, H.649
Crosby, James210
cross-country differences398, 530
cross-cultural differences397
cross-ownership263
cross-section regression436
cross-shareholding368, 466, 470–1, 473, 474, 478, 479, 480
regulatory restrictions on104
cross-subsidization8, 466, 473–4
decrease in performance by group affiliates due to472
extensive480
R&D707
Crouch, C.713
Cruz, C.398
CSR (corporate social responsibility)1, 2, 12, 59, 676, 719–44
issuance of standalone reports303
Cuervo-Cazurra, A.31, 36, 163, 171, 475, 720
Cullinan, C. P.190
cultural distance456
incentive-based compensation positively associated with451
cultural factors369, 391, 392, 396, 398, 451
national heritage472
potential differences399
shared455, 457
(p. 761) Cumming, D.9, 519, 520, 521, 526, 527, 528, 529, 530–1, 532, 533, 534 n.(2), 547, 548, 550, 571
Cuomo, F.171
Curtis, E.316
Cuyvers, L.208
Daewoo Group470
Dahiya, S.499
Dahl, R.78
Dahya, J.332, 334, 339
Dai, Na10, 567, 571, 592
Daily, C. M.372, 392, 403, 405, 412, 413 n.(4), 422, 423, 430, 431, 433, 460, 678, 687, 694
Daily, D. M.135, 142, 151, 186, 224
Dalton, C. R.135, 142, 151
Dalton, D. R.247, 248, 255, 403, 429, 430, 431, 449, 458, 466, 694
Dalziel, T.373, 406, 428
Dam, L.735
Danish firms, see Denmark
Datta, S.233, 239
D’Aveni, R. A.206, 428, 430, 687, 694
David, P.227, 247, 675, 737
Davies Report (UK 2012)189
Davila, A.238, 301
Davila, F.230
Davis, B.602 n.(3)
Davis, G.206, 207
Davis, G. F.471
Davis, S.548, 551
Dawson, Jo210
DBIS (UK Department of Business, Innovation and Skills)159 n.(5)
De Villiers, C.726, 730
Deakin, S.636
Deal Decade (1980s)52
Deb, Palash5
Debenhams540
Debicki, B. J.389
debt:
actions favoring equity over495
arrangements designed to hide284
asset sales associated with reductions498–9
may be incentivized to recover358
collateralized375
commitment to service359
convertible523, 527, 528, 531, 550
deceptive financial reporting methods that hide271
defaultable492
distressed502, 564, 572
excessive271
innovation and375, 376
leverage opportunities of269
liquid708
long-term, reselling686
misuse of resources made more difficult by375
mitigating incentives and attractiveness of270
outstanding564
overreliance for corporate investment initiatives269
prepetition572
PTP transactions sometimes financed by335
public498
reliance on, for buyouts645
rendered liquid through securitization708
restricted availability of553
restructuring497
role in compensation234
secured540–1, 573, 709
senior573
strong negative relationship between R&D spending and376
unrecoverable272
unsecured502
use in funding LBOs547
voluntary restructurings498 see also DIP; also under following entries prefixed “debt”
debt-to-assets ratio571
debt bonding542, 546
debt-equity swaps358, 359, 554, 574
debt-financing272, 277, 278, 283, 284, 286 n.(9), 328, 542
excessive274
less dependence on360
leverage from using274
mix of equity and350
(p. 762) risk arising from the use of278
risky business investments with270
debt guarantees474
debt-oriented codes113
debtor-in-possession financing690
Dechow, P.235
decision-making process166–7, 405, 608, 641, 660
autonomy in474
board279–82, 611
clearer hierarchy between board and top management411
constrained676
decentralized in relation to CSR730
discretion in469
early-stage investors’ incentive to be involved in435
employees provided with voice in637
group affiliates, control over470
imperatives for723
operational412, 532
perception of uncertainty and constraints457
transparency in438 see also strategic decision-making
decision rights103, 108, 111, 117, 118, 119, 124, 477, 516
formal641
state-owned business groups decentralize469
Dedman, E.38
Deeg, R.713, 722
default policy492
Delaware51, 85–7, 495, 503–4
DeLong, J. B.73
Deloof, Marc6
demand455, 608
declining454
saturated454
uncertainty of275–6
demand shocks329
DeMarzo, P. M.620
Demb, A.166–7
Demiroglu, C.543, 554
Democrat states (US)14
demographic variables169, 188, 189, 191
Demsetz, H.246, 252, 337
Denis, D. K.54, 56
Denmark368, 530
Dent, G. W.52
dependent variables405
depreciation policies277
depression (1930s)295
deregulation23, 26, 136
derivatives566, 578
privately negotiated564, 576 see also equity swaps
Desbrières, P.549
Deutsche Bank201, 578
Deutsche Börse564
Deutsch, Y.164
development banks581, 584, 591
Devers, C. E.239
Devos, E.207
Dewenter, K. L.594, 601
Dewick, P.368
Dhaliwal, D.303
Dharwadkar, R.227, 730, 736
Dhillon, U.508 n.(7)
Dikolli, S. S.227
DIP (debtor-in-possession) financing490, 499–500, 504, 506, 508 nn.(7/12)
majority providers of574
director networks4, 200–21 see also multiple directorships
directors:
Act that requires to promote success of the company636
advancing personal careers471
changes in roles, relationships and conduct145–51
external402
fiduciary duties of428
FTSE (100)136
incentives of285 n.(5)
inside357, 429
mutual exchange of211
non-national453
outside182, 207, 208, 402, 403, 404–5, 429, 451, 456, 457
owner637
pay ratcheted up 2458
responsibilities to shareholders271
(p. 763) restrictions imposed on length of contracts103
selection process47, 103, 188, 189, 191
shared206, 210
top, base salaries431
disclosure25, 48, 70, 100, 109, 273, 519, 602 n.(3)
accounting277
audit process322–3
benefits of292–4
biased294
cash-flow forecasts issued by management495
closely-held companies and300–2
compensation234
costs of291, 294
demands for290, 291, 295
enforcing strict requirements103
extensive664
family firm299, 404, 405
frequent676
geographic earnings298
help to improve levels of14
interim179
irrevocable commitments340
mandatory292, 296, 297, 332
mediator of information across multiple user constituencies621
ownership31, 33
private knowledge435
risk16
selective297, 303 n.(1)
strong powers to ensure296
transparent and perceptive291
voting and cash flow rights112 see also voluntary disclosure
disclosure regulation6, 15
more strict117
national291
need for295–8
discretional accruals404
Disraeli, Benjamin269, 285 n.(1)
distressed firms8
hedge funds and501, 564, 565, 567, 570
activism targeting571–6
characteristics of573
restructuring9
role of502 see also financial distress
distributional differences78
Dittmann, I.237
diversification230, 233, 235, 238, 329, 353, 358, 449
intrafamily rivalry increases the chances of688
lack of, in manager's portfolio370
market350, 357
portfolio-style357
positive effect on strategies405
product350, 357 see also overdiversification
divestment247
refocusing through353
dividends351, 491, 541, 687
double571
payouts remain low357
pre-specified522
special358, 645
divisional buyouts543, 545, 549
Djankov, S.97, 100, 129 n.(2), 253, 707
Dobbin, F.53
Dodd-Frank Act (US 2010)1, 29, 37, 229
Doherty, J. W.504, 505, 506, 508 n.(11)
Dollinger, C. M.405
Dooley, P.204, 205
dot.com boom/collapse59, 137, 141
Douglas, W. O.69
Douthwaite. S.622
Dow, J.233
downsizing349, 358, 360, 714
pressure toward707
Doz, Y. L.450, 457
Drerup, T.571
Duddy, Terry210, 211
due diligence340, 516
Dumenil, G.712, 713
dummy variable approach209, 397
Dunn, A.621
Durisin, B.55, 142, 164
Duru, A.233
Dutch matters, see Netherlands
(p. 764) Dwyer, R.712
Dyer, W. G.396, 398, 399, 736
early childhood support programs610
earnings-based metrics270
East Asia87
funds based in584 see also China; Hong Kong; Japan; Korea; Taiwan
East India Company46
Easterbrook, F. H.51, 52, 55
Easterly, W.77, 92 n.(13)
Eastern Airlines492
Eastern Europe, see Central and Eastern Europe
Easterwood, J. C.546, 547, 549, 552
Eberhart, A. C.493
EBIT (earnings before interest and tax)274, 275, 276, 277, 286 n.(11)
Eckbo, B. E.491, 494, 500, 506, 508 n.(11)
Ecoles Polytechniques204
econometric techniques217
economic growth:
law and97
long-term101
lower100
economic rationality67
economics246, 248, 540 see also transaction costs
economies of scale273
external characteristics354
economists54–6
Economist, The54, 57
Eddleston, K. A.407, 408
Edström, A.451
Ehrhardt, O.398
Eichengreen, B.90, 93 n.(23)
Eisenberg, Melvin49
Eisenberg, T.504
electronic equipment140
Elenkov, D.231
elites710
financial703
reallocation of resources to712 see also business elites
Ellemers, N.389, 406
Elson, A.51
emerging economies253, 664
concentrated ownership468
family owners dominate minority owners in675
PP conflicts in M&A deals663
PP conflicts often found in658
tunneling in business groups473
employees252
direct participation638
disclosure of information by managers to643
government582
impact of buyout on550–1
implications for639
implicit coalition between managers and81
interests of636
involvement in governance processes641–4
key, retention plans575
long-term promises to647
mechanisms to incentivize and control311
negative impact on remuneration540
non-family396
number of232
predominantly market relationships with firm639
specialized273
voice in corporate decision-making637
employment273
average reduction in distressed firms503
characteristics typically associated with corporate governance regimes647
continued667
expansion of646
increased549
internal labor market reduces managers’ risks465
long-term647, 650
net loss in gains693
positive effects of buyouts on practices551
positive impact on550
post-merger692
pressures having significant effects on646
prioritization of goals582
(p. 765) restructuring that negatively impacts on540
short-term647
showing how governance can affect11
white-collar648 see also labor
employment contracts636
empty voting564, 577
ENA (Ecole Nationale d’Administration)204
endogeneity208, 216, 369, 372, 531
endowments254, 686
Eng, L. L.298, 299
Engelberg, J.207–8, 214
Engerman, S. L.75, 77, 92 n.(11)
England77, 116, 117, 118, 121, 124, 125
and Wales613
Enriques, L.27, 28, 34, 35
Enron38, 59, 137, 171, 246, 273, 281, 291, 295, 309, 310, 313, 314, 317, 318, 709, 710
cited as success story798
Ensley, M. D.406, 407, 408
entrepreneurship7, 9, 254, 351, 356, 422, 540, 608, 678
associational616, 622
Austrian notions of353
buyouts may create opportunities376
disputes between venture capital investors and374
financial support for profitable initiatives545
governance and543–4
habitual354
IPOs and421
key functions355
managerial350, 549
new mindset693
portfolio354
role of boards in gaining access to knowledge that enhances608
Schumpeterian357
serial354, 359
social614
strategic543–4
venture capital and516–18, 521–34 see also CE
environmental fit617–20
EPA (US Environmental Protection Agency)725
EPO (European Patent Office)549
EPS (earnings per share)278, 286 n.(8)
improvement of341
equal treatment principle31, 33, 110, 112, 119
Equitable Life137
equity finance355
equity swaps:
growth in564, 576
long578
short576
typical576 see also debt-equity swaps
Ernst, H.379
Ernst & Young316
Erturk, I.704, 708, 710, 711, 712, 713, 714
ESL Investments Inc.572
ESMA (European Securities and Markets Authority)159 n.(5), 291
European Securities and Markets Authority
ESO (executive share option)432
Espenlaub, S.421
ESRC (Economic and Social Research Council)4, 135, 154, 158 n.(1)
estimation risk292
Estrin, S.377
ethics:
accountability and310
audit quality and316–19
professional317
fractionalization77
ethnicity78
EU (European Union)14–15, 26, 36, 261
accession countries116, 117, 119, 121, 124
competition authorities342
Corporate Governance Code141
family ownership estimates for unlisted firms390
listed companies required to have audit committee318
regulatory reforms32, 33
Transparency Directive (2007)295
Euronext303 n.(3), 564
Europe722
banks in82
corporate VC contracts528
(p. 766) geography over the centuries88–9
hedge fund activism571
labor in79, 82
LBO transactions539
low prominence of shareholder value in social democracies30
most listed firms are closely-held110
non-market forms of coordination prevalent in378
regulatory provisions in all countries98
retailing initiatives725
significant increases in stock prices547
stakeholder-based regime114
understaffing of stock market regulatory agencies29
venture capital funds534 n.(1) see also Central and Eastern Europe; Western Europe
European Commission38, 296, 318
Expert Group on Family Business412 n.(1)
Green Paper on Audit Policy (2010)318, 322
European Corporate Governance Institute36
European Parliament14
Eurozone crisis141
ExecuComp firms225, 231, 232, 237
executive compensation/pay/remuneration11, 16, 36, 37, 53, 56, 57, 59, 222–45, 247, 282–3, 367, 375, 451, 452, 664–5
concerns and anger regarding13
development of schemes422
ever-increasing149
high79, 720
institutional investor pressure on decision-makers5
IPOs430–1
level and structure of5
long-term incentives431–2
major mistake in the design of packages374–5
performance, leverage and earnings-based274–9
seriously limited as solution to problems374
steeply rising649
subject to greater scrutiny13
trade unions on the topic of649
tying to creditor wealth497 see also CEO pay/compensation
executive entrenchment398, 399, 405
executive ethics239
executive search companies439
executives:
C-level248
dysfunctional “corporate autocracy” oriented around48
escalation in salaries229
fiduciary obligations689
increasing proportions of non-family410–11
making strategic decisions246–7
maximizing option gains due to underpricing433
need for recruitment and retention of talent431
performance of191, 592
powerful51
protecting shareholders from self-interested whims of142
senior49, 282
separating non-executives and109
strong preference for particular candidates190
tendency to extract private benefits374
top47, 57, 564, 649
vast rewards440 see also CEOs
exit orientation436
expectations73, 83, 178, 330, 332, 337, 723
audit314
CEO-chairman146
demands and724
downward spiral in270
overly optimistic270
performance16, 736
populist613
public314
social738
TMT145
unrealistic270
unreasonable322
(p. 767) expropriation476, 482
accomplished though legal or illegal means662
external investors479
illicit473
minority shareholders99, 122, 397, 398, 473, 478, 659, 661, 666, 667, 668
external audit6, 183, 179, 180, 181, 185, 191, 309, 310–11, 314, 319
appointment and reappointment of external auditors318
listed companies required to have books audited by109
oversight of183, 318
relationship between internal and183
scope of313
external governance mechanisms6, 7, 11, 366–7, 377–9
key328
new335
strong666
externalities297
Exxon Mobil201
Ezzamel, M.185, 186, 235, 272, 280, 282, 285, 334
Faccio, M.99, 662, 664, 666–7
Facebook303
Fagerberg, J.377
Fama, E. F.51, 55, 99, 177, 247, 273, 328, 333, 389, 421, 430, 432, 661, 726
family business8, 163, 252–3, 261, 312, 389–420, 430, 468, 476, 478–9
disclosure in299
family buyouts543, 545, 549
family control398, 480
aligns interests of managers and controlling shareholders478
incentive alignment hypothesis401
publicly listed firms390, 391, 395
spreading risk without diluting468
Fang, Y.454
Farber, D. B.238
Farmer, R. E. A.534 n.(3)
FASB (US Financial Accounting Standards Board)223, 235, 286 n.(9), 291, 297, 303 n.(3), 312
fascist regimes638
fault-line theory170
FDI (foreign direct investment)456
FDIC (Federal Deposit Insurance Corporation)202
Federal Register47
Federal Reserve80, 593
Regulation Y508 n.(5)
feedback loops646
FEEM (Monitor Group and Fondazione Eni Enrico Mattei)583, 584
Fennema, M.205
Fernandes, N. G.594, 601
Fernández-Rodríguez, E.38
Feroz, E. H.178
Ferruzzi58
Festing, M.451
Fey, C. F.454
FFB (family-backed) firms402
Fich, E.208
fiduciary duty28, 428, 493, 495–6, 551, 642, 689
breach of569
Fiegener, M. K.400, 401
Filatotchev, I.6, 7, 8, 39 n., 142, 164, 349, 350, 354, 358, 359, 360, 366, 376, 381, 393, 423, 433, 436, 437, 438, 439, 451, 456, 457, 458, 482, 660, 662, 668, 669, 691, 695, 696
finance directors148, 180
relationship between CEO and145
financial choices234
financial crisis (2007–9)1, 5, 9, 12–13, 15, 59, 309, 310, 321, 539, 553, 579 n.(1), 709, 715, 720
financial distress493, 495, 502
failure to fulfill debt obligation can lead to543
impact of buyout on553–5
interaction of governance and503
managers frequently lose their jobs in8, 494
PE firms not deterred by risk of548
senior lender control in496–9
severe498
(p. 768) financial institutions139, 201, 206, 272, 704, 712, 736
centralized67, 71
connections through common directors203
considerable shareholdings via indirect stockholdings477
DIP financing574
interlocks via205
large, systemically significant321
managers encouraged to collude with706
preferences of731
rules governing351
voting power34
wary of taking risks in lending539
Financial Institutions’ Committee572
financial instruments:
complex323
illiquid, audit of fair valuation of321
intrinsic risk characteristics of291
very complicated715
financial intermediaries12, 273, 711
financial life-cycle351–3
financial metrics223
financial performance7, 10, 164, 165, 170, 182, 186, 352, 405, 409
affiliates469
family effects that predict411
family ownership in publicly listed firms396–8
innovations over short term should not be valued using375
measured in terms of key ratios350
monitoring by non-managing owners may create interference in improving410
negative effect in family-controlled firms404
observable measures of529
poor253, 339
privately-held, family and non-family firms408
short-term374–5
weaker following emergence504
widely-held firms404
financial politics65–96
financial reporting5, 171, 281, 286 n.(9)
audit committees ineffective in controlling184
confidence in295
deceptive271, 278
disclosure and corporate governance290–308
firms make choices about234
frequency of110
incentive to monitor management and179
integrity of181
major impact in global companies137
manipulation of280
new forms of320
nonprofits’ compliance with standards612
optimal outcome in the market for301
oversight of quality182–3
plethora of regulations273
standardized obligations291
strategies and choices274
uncovering and resolving potential problems in180
financial returns:
encouraged emphasis on640
lower663
financial risk274
assessing284
corporate equity insufficient to absorb273
differences in278
hidden5
high5
increasing277–8
lower170
Financial Services Modernization Act (US 1999)508 n.(5)
Financial Stability Board (UK)138
Financial Times57
financialization12, 703–18
Finkelstein, S.163, 164, 223, 229, 231, 235, 430
Finland119, 454
fire-sale problem501, 505–6, 508 n.(13)
firm characteristics232–3
firm size232
increasing273
first-past-the-post systems84
Firth, M.664, 667
(p. 769) Fischel, D. R.51, 52
Fischer, E. O.492
Fischer, H. M.223
Fiss, P. C.248, 441
fixed costs276, 277
flexibility396, 545, 546, 564, 684
evolutionary model based on410
internal650
Fligstein, N.207
Flint, D.309, 311, 312, 317
Flören, R. H.413 n.(3)
Florida139
Folkman, P.715
Forbes, D. P.169, 170
Forbes, W.285, 287 n.(15)
Ford administration48
Ford Motors202
Fordism704–6, 708, 715
foreclosure501
foreign exchange reserves583, 584, 595, 598
foreign subsidiaries39
autonomy of452
coordination and control of8, 450, 451–2, 458
dependence on headquarters458
interdependence influences performance of452
performance453, 454
relationship between MNE headquarters and457
sales455
strategic position453
Fortune 500 firms248
Fortune 1000 companies165, 170, 189
Foster, G.301
Foster, J.712
Fotak, Veljko10
Foucault, M.710, 711
foundations254, 616, 623
governance of624
shocks of rejection by611
founder effect396–7, 400, 411
Fox, I.376
Fox, J.53
F-PEC scale392
France31, 35, 89, 332, 359, 548, 550, 637, 645
civil law441
communist party88
conglomerates58
director networks203–4
employee shareholders643
legal origins116, 118, 119, 120, 121, 124, 125, 530
state activism30
VC investments436, 530
women board members189
Francis, B. B.436
Francis, J. R.315, 319, 368
Frankel, R.294
Franks, J.73, 93 n.(23), 99, 108, 280, 332, 333, 334, 338, 421, 493
Fransen, L.725
fraud109, 239, 272, 286 n.(7), 295, 614, 649
detection of310, 313, 316
leading investment banks709
prevention of313
reporting291
widespread303 n.(2)
FRC (UK Financial Reporting Council)36, 57, 137, 138, 149, 151, 181, 203, 284, 313, 319, 322, 324 n.(10)
Audit Firm Governance Code (2010)318
Audit Inspection Unit318
Guidelines for Board Effectiveness (2011)146
Professional Oversight Board318 see also Cadbury Report
Fredrickson, J. W.230, 233
free-rider problem6, 72, 273, 285, 330, 340, 471, 566
Freiwirth, J.616
Fremeth, A. R.1
French, K. R.421
Fried, J. M.223
Friedman, A.612
Frost, P.151
Froud, J.704, 706, 707, 708, 709, 710, 713, 715, 716
Frynas, G.709–10
Fryxell, G. E.731
FSA (UK Financial Services Authority)137–8, 318, 321, 553
tightening regulation of banks139
(p. 770) FTSE (Financial Times-Stock Exchange) companies4, 14, 135–62, 203, 217 n.
women directors189
fulcrum security502, 508 n.(4)
functional approach98
fund managers14, 254, 522, 523, 529–34, 535 nn.(67), 645, 711
affiliated566
alternative investment296
authority regarding investment decisions517–18
churn encouraged in portfolios645
common for pension funds to regularly change645
compensation policies and status of584
contracts between institutional investors and515
covenants relating to limitation of liability517
fees515, 520, 521, 541
financialization effect of reorienting the firm toward satisfying706
incentives to generate positive abnormal returns566
limitation of liability519
passive rights that can be exercised by526
public pension371
reluctant to alienate clients566
restrictions on investment powers518
risk of breaching contractual covenants515
short-term orientation of371
unions attempt to build relationships with644
fundamentalist religious beliefs638
fundraising609, 620
internet621
standards covering622
Furu, P.454
fuzzy sets methodology647
GAAP (generally accepted accounting principles)178, 228, 233, 297
Gabaix, X.232–3, 236
Gadhoum, Y.390
Galbraith, J. K.710
Galbraith, J. R.451
Gao Jie10
García-Meca, E.299
Garratt, B.148
Gaspar, J.548
gatekeepers311
Gates, Bill429
Gaved, M.138–9
Gaya Wicks, P.735
GDP (gross domestic product)449
Geczy, C.421
Gedajlovic, E.407, 467, 473, 476, 660, 661, 666, 668
GEEF (European Commission Expert Group on Family Business)412 n.(1)
Geletkanycz, M. A.235
Gely, R.86
Gendron, Y.177, 178, 181, 184, 192
geopolitics88–9
Georgeson Annual Corporate Governance Review (2010)228–9
Germany31, 38, 56, 57, 58, 84, 89, 312, 332, 640, 643, 645, 705
abolition of deviations from one share-one vote standard32
agency problems do not typically impact on performance for359
bank-centered business groups475
board representation642, 649, 696
boards of directors32
civil law441
codetermination29–30, 32, 81, 639, 641
costly post-unification economic adjustments57
director networks203, 204
effect of hedge fund activism on publicly listed companies571
elimination of unequal voting rights35
emphasis on investment in human capital650
employee representation on the board104, 649
external quality control317
family and non-family firms408
fascist and military regimes638
feature of acquisitions in333
insider governance639
IPOs361 n.(2), 398
(p. 771) legal origins116, 117, 118, 120, 121, 124, 125, 530
legal reforms designed to promote shareholder value32
protecting minority shareholder rights721
rankings of industries by intensity of patent registrations377–8
regulatory reforms of proxy voting33–4
statutory works councils637
training programs651
uncontested takeovers333
VC investments530
works councils642 see also Comroad; Schröder
Gersick, K. E.393, 409, 410
Geske, R.492
Ghoshal, S.389, 406, 450, 452, 453
Gianecchini, M.410
Gill, A.725
Gill, M.310, 321, 323
Gillan, S. L.565, 674, 720, 737
Gillies, J.136
Gilligan, J.541, 542, 567
Gilson, R. J.29, 32, 33, 38, 51, 56, 329, 434, 438, 440, 478, 479, 480, 527, 529, 662, 663, 664, 665, 667
Gilson, S.494, 496, 497, 498, 502
Gingerich, D.647, 651
Gini coefficients77, 78
Glass-Lewis259, 260
Glass-Steagall Act (US 1933)71, 81, 508 n.(5)
GlaxoWellcome681
Global Entrepreneurship Monitor390–1
Global Reporting Initiative standards735
globalization26, 31, 452
GM (General Motors)53, 229, 503, 506
goal alignment369, 408–9, 457
Goergen, M.34, 98, 99, 101, 102, 109, 111, 112, 280, 359, 361 n.(2), 551
Goertz, Gary38
going concerns322, 324 n.(11)
Golden, B. R.164
Goldstein, R.492
Gomez-Mejia, L. R.233, 235, 238, 252, 253, 389, 390, 398, 401, 432, 662, 664
Gompers, P. A.246, 255, 421, 429, 433, 434, 435, 436, 438, 516, 517, 522, 526, 529, 679
Goncharov, I.38
Gong, G.223
Gong, J.550
Google140, 142
CEO of262
Goranova, M.227, 663
Gordon, J. N.53, 54
Gormley, T.492
Gort, M.329
Gospel, H.11, 634, 638, 643, 644, 645, 648, 652
Gottschalg, O.550
Gourevitch, P. A.34, 83
governance mechanisms3–4, 177, 343, 369, 380, 421, 428, 452, 458
attitude of management toward192
board structure336
companies adopt a range of337
distinctive8, 466–70
formal8, 531, 532, 533
heterogeneity of439
horizontal8, 466, 467, 470–2, 475, 478–80
impact of buyout on549–50
incentive-related359
ineffective333
informal8, 531, 532, 533
interventionist and inefficient253
last resort328
non-contractual531, 532, 533
prevailing466
processes and163–76
relational408
reorganization of360
vertical8, 466, 467, 468, 475, 476–8, 479
government intervention582, 595, 596
government/state ownership252, 253, 263
business groups8, 466, 477, 479
developing economies592
fairly stable581
impact of298–9, 371, 456
investment companies/funds581, 583, 584
lessons from SWFs for governance and600–2 see also SOEs
Govindarajan, V.453
(p. 772) Goyer, Michel2, 30, 31, 38, 674
GPFG (Norwegian Government Pension Fund-Global)584, 587, 591, 593
Graebner, M. E.171, 260, 696
Graham, J.612–13
Grandes Ecoles203
Granovetter, M.208, 214, 465, 472, 476
graph theory209–14
Graves, S. B.735
Gray, I.315, 318
Greckhamer, T.237
Green, Mark48
green management practices1
Greenbury, Sir Richard57
Greene, S.602 n.(3)
Greenfield, P.704
greenfield investments456, 459
job creation551
Greening, D. W.676, 735
Greenlee, J.609
greenmail262, 474
Greenough, W. C.47, 50
Greenwood, R.570
Gresham's Law281
Greve, H.685
Grinstein, Y.224–7
Grossman, S. J.99, 330, 367
group affiliates8, 473
control over467, 468, 470, 478
cross-subsidization may benefit474
decentralizing the decision rights of469
exchange of resources and information among471
family-controlled480
improving the efficiency of469
indirect cross-shareholding structures470
interdependence and cross-monitoring among474
long-term and stable relationships among472
multiple long-term relational ties among465
mutual commitment and interdependence among470
mutual monitoring466, 471
performance implications of482
resourceful and profitable466
sharing of knowledge and resource among469
state-owned477, 478
strategic control can mitigate against470
strong connectedness among470
ties among467, 472
underperforming466, 474, 482
widespread cross-shareholdings among471 see also horizontal linkages; vertical linkages
groupthink151, 168, 279
growth329, 354–5, 359
future prospects351, 356
low prospects336, 357
opportunities for498
opportunity for356, 357
phases of349, 353, 356, 357
poorer prospects336
rapid353, 356 see also economic growth
Grundfest, J.72
grupos economicos465
guanxi qiye465
Gubitta, P.410
Guedj, I.208
Guidelines Monitoring Group14
Guidestar621
Gulati, R.421
Gulbrandsen, M.373
Guo, R.-J.294, 301
Guo, S.549
Gupta, A. K.373, 453
GUS plc210
Gutierrez, L.208
Guttman scale392
Haber, S. H.75
Hadass, L.436
Hail, L.303 n.(1)
Haleblian, J.353
Hall, B. H.375, 376, 378
Hall, B. J.238–9
Hall, P.647, 651
Hall, P. A.93 n.(21), 722
Hallock, K.207
(p. 773) Halpern, P.336, 339
Hambrick, D. C.135, 142, 143, 163, 421
Hampel Report (UK 1998)57, 287 n.(14)
Handelsbank group471
Haniffa, R. M.299, 303 n.(1), 398
Hansmann, H.102–3, 636
Harford, J.225
Harianto, I.207
Harris, D.232
Harris, R.548
Harrow, Jenny11, 610–11, 610, 614, 619,620, 622
Hart, O.36, 99, 330, 367, 491, 531, 543
Hartaska, V.619
Harvey, D.712
Hasan, I.436
Haunschild, P.206–7
Haynes, M.360
Hayward, M. L. A.680
HBOS (Halifax-Bank of Scotland)209
He, L.185
hedge funds9, 10, 137, 139, 230, 255, 258, 262, 296, 501–2, 564–80, 581, 592, 652, 686, 690
alleged impact on asset-stripping and short-termism13
claims commonly acquired and consolidated by501
directional or momentum strategy645–6
directional trading strategies645–6
impact felt primarily in listed, public companies645
potential to influence boards567
role in distressed firms502
short-term initiatives259
Hedlund, G.451
Hegarty, W. H.253
Heinz (J.J.)564
Heinze, T.203
Helfat, C.232
Hellman, T.352, 371
Henderson, A. D.230, 233
Hendry, C.186–7
Henokiens413 n.(2)
herd-like behavior149, 270, 281
Hessen, R.52
Higgins, M.421
Higgs Review (UK 2003)137, 148, 179, 180, 190, 191, 203, 287 n.(14)
high-tech firms7, 365–88
Higson, A.314
Hill, C. W.368
Hill, S.167
Hillegeist, S.236
Hillman, A. J.372, 373, 406, 428
Hillman, A. J.730
Himmelberg, C. P.248
Hippel, T. von608, 621
Hirano, Hidekazu258
Hirshleifer, D.374
Hirst, P.705, 706
Hitt, M. A.458, 469
HLTs (highly leveraged transactions)492–3
Ho, S. S.398
Hobson, J.712
Hochberg, Y.208, 436
Hoff, K.75
Hogg, Sir Christopher138
holding companies600
Holl, P.341
Hollinger281
Holmstrom, B.54, 370, 374
Home Retail Group plc210
Hong Kong397, 398, 401, 404, 661
business groups471, 473
Hong Kong Stock Exchange299, 599
Hope, O.-K.298
Hopt, K. J.608, 621
Hopwood, A. G.309
horizon problem232
horizontal linkages467
extensive479
Hornby, Andy203, 209–10
Hoskisson, R. E.5, 12, 246, 253, 254, 259, 350, 370–1, 372, 376, 441, 469, 475, 477, 660, 674, 675, 682, 695, 697
hostile takeovers6, 86, 332–4, 337, 648
disruptions of79–80
downsizing to discourage714
friendly vs33
managers seek laws that impede or bar72
non-hostile and329, 338, 339, 341, 342
opposed83
poison pill to deter52
(p. 774) successfully resisted341
threat of108, 330–1, 336, 378
Hotchkiss, E. S.8, 491, 494, 495, 496, 501, 554, 555
Hough, A.619
Houston Exploration564
HPWP (high-performance work practices)551
HRM (human resource management)540, 638
Hsu, D. H.371
Hu, H. T. C.576, 577
Huafang, X.298, 299
hubris329
Hudson's Bay Company46
Hughes, Penny211
human capital707
firm-specific650, 651
long-term investments in650
human resource development646 see also HRM
Humphrey, C.314
Hunt, R.540
Huntington, S. P.76
Huse, M.136
Hutton, A.235
Hutton, W.646
Hwang, B.214
hybridization714
facing up to607–33
IASB (International Accounting Standards Board)286 n.(9), 291, 303 n.(3), 312
IBM53
IBOs (investor-led buyouts)551
ICAEW (Institute of Chartered Accountants of England and Wales)137
Icahn, Carl263
ICBC (Industrial and Commercial Bank of China)596, 598, 599
Iceland119
identity of owners369–71
IFAC (International Federation of Accountants)11, 313, 314, 315, 324 n.(11)
International Auditing Practices Committee315
IFRS (International Financial Reporting Standards 8)297
illiquidity321, 435, 520, 531, 566
imperfect markets453
Inc.500 first-generation firms408
incentives179, 223, 227, 246–68, 285 n.(5), 370, 371, 373, 436, 451, 492, 567, 592, 660
additional risk232
agent-principal310
aligned225, 520, 541
assessment of271
auditor317
bank477
compensation more likely based on452
controlling shareholder659, 667
cross-monitoring free-riding behaviors471
derived from family membership401
direct, for top management328
disclosure that will reduce competitive position294
economic582, 663
effect associated with managerial wealth gains360
entrepreneurial545
equity185
equity-linked374
excessive risk-taking491
executive421
explicit, agents do not need369
financial542, 543
government employees lack582
high-powered374
highly leveraged274
incumbent large shareholders547
insufficiently strong271
investment489
leverage494
long-term178, 282, 374, 375, 431–2, 440, 453, 649
micro-level291
misalignment of358, 435
misleading outside investors272
mitigating270
non-disclosure298
optimal375
ownership236, 252, 273
(p. 775) pay for top managers648
performance-based393
possibility to reduce284
reduced474
short-term375
small investors in follow-on rounds of financing368
straight equity374
strategic control provides for group affiliates469
strong272, 574, 663, 692
stronger mechanisms335
sufficient to pursue innovation371
systems for top managers influence knowledge sharing454
tax725
threat of takeover provides334
tradeoff between liquidity and368 see also managerial incentives
independent directors31, 48, 111–12, 271, 400–1, 439
may improve extent and quality of monitoring423
part-time274
positively related to FDI456
presence in non-family firms404
role may vary between family and non-family firms403 see also SIDs
India90
business houses465, 473, 482 see also Satyam
individualism398
Indjejikian, R. J.230, 231
Indonesia468, 661–2
industrial relations551, 642, 648, 651–2, 653
external flexibility in30
literatures637
showing how governance can affect11
industrial revolution77
inequality77–9
income737
information advantages342
information asymmetries290, 299, 311, 356, 421–8
assumption that disclosures would only be able to solve300
imperfect markets cause453
increased benefits of management ownership concentration370
IPO underpricing and678
news which directly mitigates296–7
reducing292, 300, 303, 435
information flows641
fostering381
private, between firms and banks294
information risk292
inheritance668
innovation365, 714
CEO's short-term compensation is related to375
costs of financing investments378
debt and375, 376
development of367
effect of acquisitions on379
external371
fundamental ingredient in379
growing narrative on709
incremental376, 378
influences on377
internal675
long-term-oriented strategies378
market-oriented376
motivating375
negative effect of acquisitions on379
openness a characteristic of380–1
organizational design aspects that favor380
ownership concentration and367–8, 369, 377
pay-for-performance schemes may have an adverse effect on375
preference for different types of371
presence of outside board members tilts toward acquisition372
private ownership gives sufficient incentives to pursue371
radical378, 380
risk-aversion of owner-managers holds back370
short- and long-term implications of375
social624
successful375
takeover pressure on378, 379
venture capital financing and371
(p. 776) innovation performance:
high-tech365
performance post-acquisition379
inside information300
access to302
revelation to the public292
specific stakeholders may require300
whether management has exploited552
insider control477
insider economies312
insider equity248
insider trading:
large blockholders112
pernicious dealings73
regulation98
sanctions70
well-connected directors likely to trade on information216
insiders30, 223, 248, 636
access to private information300
adventures that benefited a small pool of corporations712–13
board should be smaller and dominated by372
controlling72
4enriched at the expense of others709
equity owned by247
monitors on33
opportunistic423
private benefits of control293
unmonitored26
unprecedented conduct by28 see also relational-insider systems
insolvency492, 493, 495, 596
deep496
formal543, 555
MBIs have higher propensity to554
instant messaging140
Institute of Directors (UK)283
institutional governance5, 234–5
institutional investors38, 54, 56, 58, 186, 285, 516, 518, 522, 534, 543, 638, 640, 678, 679–80, 681, 682, 691, 696
advisory bodies provide corporate governance solutions to259
analysts of711
characteristics of37
contracts between fund managers and515
cooperation among695