CORPORATE GOVERNANCE
2008 Fall
Prof. Tai Ma
1. Purpose
We will cover the various aspects in corporate governance, especially on
ownership, institutional investors' role, board of directors' role and
evaluation, corporate governance guidelines and practices, and
management compensation. Students will learn the recent trend in corporate
governance practice and examine the literature of different corporate
governance mechanisms.
2. Textbook and references
(1)
Robert A.G. Monks and Nell
Minow, Corporate Governance, 3rd ed., Blackwell publishing, 2004.
(2)
Corporate Governance: An
International Review,
(3)
J of Applied Corporate
Finance, J of Finance, and other academic journals
3. Assignments
Each student is expected to make three 20-minute oral presentations
on assigned readings during the semester. In addition, students are
required to make two 5-minute presentations on latest corporate
governance issues. A term paper should be turned in before semester
end, and it is advised to be team work of no more than three members.
4. Grading
class participation (incl cyber university
classroom discussion) 10%
oral presentation on reading assignments 50%
brief presentation on new issues 15%
homework assignments 10%
term paper 15%
5.
(1) Corporate role
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1-1
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Sandra Dawson, “Balancing Self-interest and
Altruism: corporate governance alone is not enough”, Corporate Governance: An
International Review, Vol.12, Iss.2, Apr 2004, 130-133. |
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1-2
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Funmi Ade-Ajayi, “International Corporate
Governance and the Responsibility of the Brand”, Corporate Governance: An
International Review, Vol.12, Iss.2, Apr 2004, 184-190. |
(2) Valuation
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2-1
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Juan Carlos Gozzi, Ross Levine, Sergio L. Schmukler,
“Internationalization and The Evolution of Corporate Valuation”, Journal of
Financial Economics, Vol.88, Iss.3, 2008, 607-632. |
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2-2
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Gerard Caprio, Luc Laeven, Ross Levine, “Governance and Bank Valuation”,
Journal of Financial Intermediation, Vol.17, Iss.13, 2008, 584-617. |
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2-3
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Anlin Chen, Lanfeng Kao, Meilan Tsao, Chinshun Wu, “Building a
Corporate Governance Index from the Perspectives of Ownership and Leadership
for Firms in Taiwan”, Corporate Governance: An International Review,
Vol. 15, Iss.2, 2007, 251-261. |
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2-4
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Michael C. Jensen, “Agency Costs of Overvalued
Equity”, Financial Management, Spring 2005, 5-19. |
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2-5
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Joel Stern, “Corporate Governance, EVA, and
Shareholder Value”, Journal of Applied Corporate Finance, Vol.16, No.2-3,
2004, 91-99. |
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2-6
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K. J. Martijn Cremers, Vinay B. Nair, “Governance
Mechanisms and Equity Prices”, Journal of Finance, Vol.60, Iss.6, 2005,
2859-2894. |
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7-3 |
Hawley, James; Williams, Andrew, “Universal
Owners: challenges and opportunities”, Corporate Governance: An International Review,
Vol. 15, Iss.3, 2007, 415-420. |
(3) Ownership
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3-1
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John J. Moon,
“Public vs. Private Equity” Journal of Applied Corporate Finance, Vol. 18, Iss.3,
2006. |
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3-2
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Jae-Seung Baek,
Jun-Koo Kang, and Inmoo Lee, “Business
Groups and Tunneling: Evidence from Private Securities Offerings by Korean
Chaebols”, Journal of Finance, Vol.LXI, No.5, October 2006. |
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3-3
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Peter Roosenboom and
Willem Schramade, “The price of power: Valuing the controlling position of
owner–managers in French IPO firms”, Journal of Corporate Finance, Vol.12,
Iss.2, 2006, 270-295. |
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3-4
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Steen Thomsen, Torben Pedersen and Hans Kurt Kvist,
“Blockholder ownership: Effects on firm value in market and control based
governance systems”, Journal of Corporate Finance, Vol.12, Iss.2, 2006,
246-269 |
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3-5
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Yan-Leung Cheung, P. Raghavendra Rau, Aris
Stouraitis, “Tunneling, Propping, and Expropriation: Evidence from Connected
Party Transactions in |
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3-6
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Henry McVey, Jason Draho, “ |
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3-7
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Yin-Hua Yeh, “Do Controlling Shareholders Enhance
Corporate Value?”, Corporate Governance: An International Review, Vol.13,
Iss.2, Mar 2005, 313-325. |
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3-8
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C. B. Ingley, N. T. van der Walt, “Corporate
Governance, Institutional Investors and Conflicts of Interest”, Corporate
Governance: An International Review, Vol.12, Iss.4, Oct 2004, 534-551. |
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3-9
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Steve Letza, Xiuping Sun, James Kirkbride,
“Shareholding Versus Stakeholding: a critical review of corporate
governance”, Corporate Governance: An International Review, Vol.12, Iss.3,
July 2004, 242-262. |
(4) Directors’ role and Board compensation
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4-1
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Thomas W. Bates, David A. Becher, Michael L. Lemmon,
“Board Classification and Managerial Entrenchment: Evidence from the Market
for Corporate Control”, Journal of Financial Economics, Vol.87, Iss.3, 2008,
656-677. |
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4-2
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Kam C. Chan, Joanne Li, “Audit
Committee and Firm Value: Evidence on Outside Top Executives as
Expert-Independent Directors”, Corporate
Governance: An International Review, 2008, Vol. 16 Issue 1, 16-31. |
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4-3
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Mooweon Rhee, Ji-Hwan Lee, “The
Signals Outside Directors Send to Foreign Investors: Evidence from |
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4-4
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Nicholson,
Gavin J.; |
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4-5
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Anderson,
David W.; Melanson, Stewart J.; Maly, Jiri, “The Evolution of Corporate Governance: power
redistribution brings boards to life”, Corporate Governance: An International
Review, 2007, Vol. 15 Issue 5, 780-797. |
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4-6
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Eliezer M. Fich and Lawrence J. White, “Why do CEOs
reciprocally sit on each other's boards?”, Journal of Corporate Finance,
Vol.11, Iss.1-2, 2005, 175-195 |
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4-7
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Michael Useem, Andy Zelleke, “Oversight and
Delegation in Corporate Governance: deciding what the board should decide”,
Corporate Governance: An International Review, Vol.14, Iss.1, Jan 2006, 2-12. |
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4-8
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Geoffrey C. Kiel, Gavin J. Nicholson, “Evaluating
Boards and Directors”, Corporate Governance: An International Review, Vol.13,
Iss.5, Sept 2005, 613-631. |
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4-9
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Bob Garratt, “A Portrait of Professional Directors:
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4-10
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Gavin J. Nicholson, Geoffrey C. Kiel, “A Framework
for Diagnosing Board Effectiveness”, Corporate Governance: An International
Review, Vol.12, Iss.4, Oct 2004, 442-460. |
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4-11
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L. A. A. Van den Berghe, Abigail Levrau,
“Evaluating Boards of Directors: what constitutes a good corporate board?”,
Corporate Governance: An International Review, Vol.12, Iss.4, Oct 2004,
461-478. |
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4-12
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Val Singh, Susan Vinnicombe, “Why So Few Women
Directors in Top |
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4-13
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Reggy Hooghiemstra, Jaap van Manen, “The
Independence Paradox: (im)possibilities facing non-executive directors in The
Netherlands”, Corporate Governance: An International Review, Vol.12, Iss.3,
July 2004, 314-324. |
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4-14
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Niamh Brennan, Michael McDermott, “Alternative
Perspectives on |
(5) Management compensation
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5-1
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Jie Cai and Anand M. Vijh, “Incentive Effects of
Stock and Option Holdings of Target and Acquirer CEOs”, The Journal of
Finance, Vol. 62, Iss.4, 2007, 1891-1933. |
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5-2
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Drobetz,
Wolfgang; Pensa, Pascal; Schmid, Markus M, “Estimating the Cost of Executive Stock Options:
evidence from Switzerland”, Corporate Governance: An International Review, 2007, Vol. 15
Issue 5, 798-815. |
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5-3
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Christopher C. Géczy, Bernadette A. Minton and
Catherine M. Schrand, “Taking a View: Corporate Speculation, Governance, and
Compensation”, The Journal of Finance, Vol. 62, Iss.5, 2007, 2405-2443. |
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5-4
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Gerald T. Garvay and Todd T. Milbourn, “Asymmetric
benchmarking in compensation: Executives are rewarded for good luck but not
penalized for bad”, Journal of Financial Economics, Vol.82, Iss.1, Oct 2006,
197-225. |
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5-5
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Stephen O'Byrne, David Young, “Top Management
Incentives and Corporate Performance”, Journal of Applied Corporate Finance,
Vol.17, No.4, Fall 2005, 105-114. |
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5-6
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Ying-Fen Lin, “Corporate Governance, Leadership
Structure and CEO Compensation: evidence from |
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5-7
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Alberto de Miguel, Julio Pindado, Chabela de |
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5-8
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Steve Thompson, “The Impact of Corporate Governance
Reforms on the Remuneration of Executives in the |
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5-9
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Ruth Bender, “Why Do Companies Use
Performance-Related Pay for Their Executive Directors?”, Corporate
Governance: An International Review, Vol.12, Iss.4, Oct 2004, 521-533. |
(6) Corporate governance & Corporate
finance
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6-1
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Hagendorff,
Jens; Collins, Michael; Keasey, Kevin, “Bank Governance and Acquisition Performance”, Corporate Governance: An International
Review, 2007, Vol. 15 Issue 5, 957-968. |
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6-2
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Chung-Hua
Shen; Hsiang-Lin Chih, “Earnings Management and Corporate Governance in
Asia's Emerging Markets”, Corporate Governance: An International Review, 2007, Vol. 15
Issue 5, 999-1021. |
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6-3
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Özgür Arslan, Mehmet Baha Karan, “Ownership
and Control Structure as Determinants of Corporate Debt Maturity: a panel
study of an emerging market”, Corporate Governance: An International Review,
Vol. 14, Iss.4, 2006, 312-324. |
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10-4 |
Jarrad Harford, Sattar A. Mansi, William F. Maxwell
“Corporate Governance and Firm Cash Holdings in the |
(7) Corporate governance & Institutional
investor
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3-1 |
Alon Brav ,WEI JIANG, Frank Partnoy and Randall Thomas, “Hedge Fund
Activism, Corporate Governance, and Firm Performance”, The Journal of
Finance, Vol. 63, Iss.4, 2008, 1729-1775. |
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7-1
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Thomas, Simon; Repetto, Robert;
Dias, Daniel, “Integrated Environmental and
Financial Performance Metrics for Investment Analysis and Portfolio
Management”, Corporate Governance: An International Review,
Vol. 15, Iss.3, 2007, 421-426. |
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10-3 |
Gerald F. Davis, E. Han Kim, “Business Ties and Proxy Voting by Mutual Funds”, Journal of Financial Economics, Vol.85, Iss.2, 2007, 552-570. |
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Xia Chen, Jarrad Harford, Kai Li, “Monitoring: Which Institutions Matter?”,
Journal of Financial Economics, Vol.86, Iss.2, 2007, 279-305. |
(8) Disclosure transparency
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8-1
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Jinho Chang, Young
Jun Cho, Hyun-Han Shin, “The Change in Corporate Transparency of Korean
Firms After the Asian Financial Crisis: an analysis using analysts' forecast
data”, Corporate Governance: An International Review,
Vol. 15, Iss.6, 2007, 1144-1167. |
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8-2
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Walter Aerts, Denis
Cormier, Michel Magnan, “The Association Between Web-Based Corporate
Performance Disclosure and Financial Analyst Behaviour Under Different”, Corporate Governance: An International Review,
Vol. 15, Iss.6, 2007, 1301-1329. |
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8-3
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Christian Leuz and Felix
Oberholzer-Gee, “Political relationship, global financing, and corporate transparency:
Evidence from |
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8-4
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Tom King, “Making Financial Goals and Reporting
Policies Serve Corporate Strategy: The Case of Progressive Insurance”,
Journal of Applied Corporate Finance, Vol.16, No.4, 2004, 17-26. |
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8-5
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Eva Parum, “Does Disclosure on Corporate Governance
Lead to Openness and Transparency in How Companies are Managed? ”, Corporate
Governance: An International Review, Vol.13, Iss.5, Sept 2005, 702-709. |
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8-6
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Peter Collett, Sue Hrasky, “Voluntary Disclosure of
Corporate Governance Practices by Listed Australian Companies”, Corporate
Governance: An International Review, Vol.13, Iss.2, Mar 2005, 188-196. |
(9) International comparison
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7-1 |
Doidge, Craig, Andrew Karolyi, G., and Stulz, Rene
M., “ Why Do Countries Matter So Much for Corporate Governance?”, Journal of
Financial Economics, Vol. 86, Iss.1, 2007, pp. 1-39. |
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9-1
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Óscar López-de-Foronda, Félix J. López-Iturriaga,
Marcos Santamaría-Mariscal, “Ownership Structure, Sharing of Control and
Legal Framework: international evidence”, Corporate
Governance: An International Review, Vol. 15, Iss.6, 2007,
1130-1143. |
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9-2
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John Buchanan, “Japanese Corporate Governance and
the Principle of "Internalism"”, Corporate
Governance: An International Review, Vol. 15, Iss.1, 2007, 27-35. |
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9-3
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Dennis C. Mueller, “The Anglo-Saxon Approach to
Corporate Governance and its Applicability to Emerging Markets”, Corporate
Governance: An International Review, Vol. 14, Iss.4, 2006,
207-219. |
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9-4
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Ajit Singh, Ann Zammit, “Corporate Governance, Crony
Capitalism and Economic Crises: should the |
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9-5
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Ruth V. Aguilera, Cynthia A. Williams, John M.
Conley, Deborah E. Rupp, “Corporate Governance and Social Responsibility: A
Comparative Analysis of the |
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9-6
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Theodor Baums, Kenneth E. Scott, “Taking
Shareholder Protection Seriously? Corporate Governance in the |
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9-7
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Theodor Baums, Kenneth E. Scott, “Taking
Shareholder Protection Seriously? Corporate Governance in the |
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9-8
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Gerhard Cromme, “Corporate Governance in |
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9-9
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Gregory Jackson, “Stakeholders under Pressure:
corporate governance and labour management in |
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9-10
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Chi-Kun Ho, “Corporate Governance and Corporate
Competitiveness: an international analysis”, Corporate Governance: An
International Review, Vol.13, Iss.2, Mar 2005, 211-253. |
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9-11
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Julan Du, Yi Dai, “Ultimate Corporate Ownership
Structures and Capital Structures: evidence from East Asian economies”,
Corporate Governance: An International Review, Vol.13, Iss.1, Jan 2005,
60-71. |
(10) Practices / Trends
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8-1 |
Gianni De Nicolò, Luc Laeven, Kenichi Ueda, “Corporate Governance Quality:
Trends and Real Effects”, Journal of Financial Intermediation,
Vol. 17,Iss 3, 2008, 198-228. |
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10-1
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RONALD W. MASULIS, Cong Wang and Fei Xie,
“Corporate Governance and Acquirer Returns”, The Journal of Finance, Vol. 62,
Iss.4, 2008, 1851-1889. |
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10-2
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Alexander Dyck and Natalya Volchkova, “The
Corporate Governance Role of the Media: Evidence from |
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10-3
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Stijn Claessens, Erik Feijen, Luc Laeven,
“Political Connections and Preferential Access to Finance: The Role of
Campaign Contribution”, Journal of Financial Economics, Vol.88, Iss.3, 2008,
554-580. |
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10-4
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Garen Markarian, Antonio Parbonetti, and Gary
John Previts, “The Convergence of Disclosure and
Governance Practices in the World's Largest Firms”, Corporate Governance: An
International Review, Vol. 15, Iss.2, 2007, 294-310. |
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10-5
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Anil Shivdasani, Marc Zenner, “Best Practices in
Corporate Governance: What Two Decades of Research Reveals”, Journal of
Applied Corporate Finance, Vol.16, No.2-3, 2004, 29-41. |
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10-6
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Benjamin E. Hermalin, “Trends in Corporate
Governance”, Journal of Finance, Vol.60, Iss.5, 2005, 2351-2384. |
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10-7
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Ingrid Bonn, Josie Fisher, “Corporate Governance
and Business Ethics: insights from the strategic planning experience”,
Corporate Governance: An International Review, Vol.13, Iss.6, Nov 2005,
730-738. |
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10-8
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Martin Hilb, “New Corporate Governance: from good
guidelines to great practice”, Corporate Governance: An International Review,
Vol.13, Iss.5, Sept 2005, 569-581. |
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10-9
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Chris Mallin, “Corporate Governance: a review of
some key developments”, Corporate Governance: An International Review,
Vol.13, Iss.2, Mar 2005, 107. |
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10-10
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Christian Strenger, “The Corporate Governance
Scorecard: a tool for the implementation of corporate governance”, Corporate
Governance: An International Review, Vol.12, Iss.1, Jan 2004, 11-15. |
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8-4 |
Chris Mallin, “Trends in Levels of Voting and Voting Disclosure”, Corporate Governance: An
International Review, Vol. 14, Iss.2, 2006, 73-74. |
(11) Cases
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11-1
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Lineke Sneller and Henk
Langendijk, “Sarbanes Oxley Section 404 Costs of Compliance: a case study”, Corporate
Governance: An International Review, Vol. 15, Iss.2, 2007,
101-111. |
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11-2
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Timothy A. Kruse, “Minority
Expropriation and Shareholder Activism Following Olivetti's Hostile Takeover
of Telecom Italia”, Corporate
Governance: An International Review, Vol. 15, Iss.2, 2007,
133-143. |
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11-3
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Jean-Michel Bonvin, “Corporate
Social Responsibility in a Context of Permanent Restructuring: a case study
from the Swiss metalworking sector”, Corporate
Governance: An International Review, Vol. 15, Iss.1, 2007, 36-44. |
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11-4
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Bernard Taylor, “Shell
Shock: why do good companies do bad things? ”, Corporate
Governance: An International Review, Vol. 14, Iss.3, 2006,
181-193. |
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11-5
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Abe de Jong, Douglas V. DeJong, Gerard Mertens and
Charles E. Wasley, “The role of self-regulation in corporate governance:
evidence and implications from The Netherlands”, Journal of Corporate
Finance, Vol.11, Iss.3, 2005, 473-503. |
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11-6
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Thomas Clarke, “Accounting for Enron: shareholder
value and stakeholder interests”, Corporate Governance: An International
Review, Vol.13, Iss.5, Sept 2005, 598-612. |
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11-7
|
Andrea Melis, “Corporate Governance Failures: to
what extent is Parmalat a particularly Italian Case?”, Corporate Governance:
An International Review, Vol.13, Iss.4, July 2005, 478-488. |
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11-8
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Masaru Yoshimori, “Does Corporate Governance
Matter? Why the Corporate Performance of Toyota and Canon is |
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11-9
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Simon Deakin, Suzanne J. Konzelmann, “Learning from
Enron”, Corporate Governance: An International Review, Vol.12, Iss.2, Apr
2004, 134-142. |
(12) Others
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12-1
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Mauricio
Jara-Bertin, Félix J. López-Iturriaga, Óscar López-de-Foronda, “The Contest
to the Control in European Family Firms: How Other Shareholders Affect Firm
Value”, Corporate Governance: An International Review, 2008, Vol. 16 Issue 3,
160-177. |
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12-2
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Carver,
John, “The Promise of Governance Theory: beyond codes and
best practices”, Corporate Governance: An International
Review, 2007, Vol. 15 Issue 6, 1030-1037. |
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12-3
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James M. Nelson, “The “CalPERS effect” revisited
again ”, Journal of Corporate Finance, Vol.12, Iss.2, 2006, 187-213. |
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12-4
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Fengghua Song and Anjan V. Thakor, “Information
Control, Career Concerns, and Corportate Governance”, The Journal of Finance,
Vol.61, Iss.4. |
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12-5
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Bruce Haslem, “Managerial Opportunism during
Corporate Litigation”, Journal of Finance, Vol.60, Iss.4, 2005, 2013-2043. |
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12-6
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Andrew M. Clearfield, “"With Friends Like
These, Who Needs Enemies?" The Structure of the Investment Industry and
Its Reluctance to Exercise Governance Oversight”, Corporate Governance: An
International Review, Vol.13, Iss.2, Mar 2005, 114-121. |
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12-7
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Stilpon Nestor, “Falling Between the Cracks:
privatisation and corporate governance in the European telecom industry”,
Corporate Governance: An International Review, Vol.13, Iss.2, Mar 2005,
137-155. |