Program on Corporate Governance
Harvard Law School
http://www.law.harvard.edu/programs/olin_center/corporate_governance
The Program on Corporate Governance is pleased to announce the issuance of two discussion papers:
The Elusive Quest For Global Governance Standards
Public and Private Firm Compensation Compared: Evidence from Japanese Tax Returns
Below are the abstracts of the two papers:
The Elusive Quest For Global Governance Standards
by Lucian Bebchuk and Assaf Hamdani
Abstract:
Researchers and shareholder advisers have devoted much attention to developing metrics for assessing the governance of public companies around the world. These important and influential efforts, we argue, suffer from a basic shortcoming. The impact of many key governance arrangements depends considerably on companies' ownership structure: measures that protect outside investors in a company without a controlling shareholder are often irrelevant or even harmful when it comes to investor protection in companies with a controlling shareholder, and vice versa. Consequently, governance metrics that purport to apply to companies regardless of ownership structure are bound to miss the mark with respect to one or both types of firms. In particular, we show that the influential metrics used extensively by scholars and shareholder advisers to assess governance arrangements around the world - the Corporate Governance Quotient (CGQ), the Anti-Director Rights Index, and the Anti-Self-Dealing Index - are inadequate for this purpose.
We argue that, going forward, the quest for global governance standards should be replaced by an effort to develop and implement separate methodologies for assessing governance in companies with and without a controlling shareholder. We also identify the key features that these separate methodologies should include, and discuss how to apply such methodologies in either country-level or firm-level comparisons. Our analysis has wide-ranging implications for corporate-governance research and practice.
Public and Private Firm Compensation Compared: Evidence from Japanese Tax Returns
by J. Mark Ramseyer, Minoru Nakazato, and Eric Bennett Rasmusen
Abstract:
Most studies of executive compensation focus on publicly traded companies. The high levels of compensation there are often attributed to agency slack due to ownership by diffused shareholders. If so, pay at private companies more closely held should be much lower. Governments in the United States and elsewhere do not require the pay of executives in private companies to be publicly disclosed, but until 2004 the tax office of Japan published the name and tax liability of any individual paying over about $100,000 in tax. We match this tax data with rosters of some 1,400 presidents of public and 4,100 presidents of private corporations. We find that public and private company presidents have similar incomes. Both groups earn incomes that rise with the size and profitability of the firm, but the presidents' incomes are more sensitive to profitability at public firms than at private ones. In Japan, at least, public firms pay their presidents no more than private firms do, and tie that compensation more closely to observable performance benchmarks.
The Program on Corporate Governance is also pleased to announce the creation of the Corporate Governance Network (CGN) of the Social Science Research Network (SSRN). CGN will provide a worldwide, online community for research in all areas of corporate governance, following the model of other subject matter networks within SSRN. CGN is expected to become a comprehensive online resource for research in corporate governance, providing scholars with access to current work in their field and facilitating research and scholarship.
More information about CGN can be found on its homepage at the SSRN site, http://www.ssrn.com/cgn/index.html. This webpage includes information for authors wishing to submit work for distribution by CGN, for readers wishing to subscribe to journals of CGN, and to individuals and organizations wishing to distribute professional announcements in the corporate governance area through CGN.
Work in the corporate governance area can be divided accordingly to either methodological lines or subjects of inquiry. CGN includes 8 ejournals defined by methodology and 13 ejournals defined by subject matter studied. To make CGN most useful for both authors and subscribers, authors submitting their work to CGN should submit it to no more than two CGN journals, one defined by methodology and one defined by subject matter.
The ejournals defined by methodology are:
* Corporate Governance & Accounting
* Corporate Governance & Economics
* Corporate Governance & Finance
* Corporate Governance & Law
* Corporate Governance & Management
* Corporate Governance & Sociology or Psychology
* Corporate Governance Educator
* Corporate Governance Practice Series
The ejournals defined by subject of inquiry are:
* Corporate Governance: Acquisitions, Mergers, Contests for Control, & Activism
* Corporate Governance: Actors & Players
* Corporate Governance: Arrangements & Laws
* Corporate Governance: Bankruptcy, Financial Distress, & Reorganization
* Corporate Governance: Capital Raising, Investments, Distributions, & Market Trading
* Corporate Governance: Comparative
* Corporate Governance: Compensation of Executives & Directors
* Corporate Governance: Economic Consequences, History, Development, & Methodology
* Corporate Governance: Disclosure, Internal Control, & Risk-Management
* Corporate Governance: Internal Governance, Organization, & Processes
* Corporate Governance: Governance of Special Types of Firms
* Corporate Governance: International/Non-US
* Corporate Governance: Social Responsibility & Social Impact
Please visit the Harvard Law School Forum on Corporate Governance and Financial Regulation:
http://blogs.law.harvard.edu/corpgov
Or sign up to get email announcements about new posts:
http://blogs.law.harvard.edu/corpgov/announcements
Posts placed during the past ten days include:
Market Conditions and the Structure of Securities
SEC Brings First Insider Trading Case Regarding CDSs
Proposed New European Regulation of Investment Funds
Disclosure and the Cost of Capital
Federal Trade Commission Inquires Into Interlocking Boards
Strategies for the New Reality of Shareholder Proxy Access
What Do Independent Directors Know?
Stress Testing the Government's Chrysler Plan
The Proposed "Shareholder Bill of Rights Act of 2009"
(Re)regulation of Financial Services?Back to the Future?
Recent Poison Pill Developments and Trends
Mutual Fund Advisory Fees
Post-SOX changes in Bonus Contracts
Avoiding Shareholder Activism
Beneath the Hype: Notes on Key Executive Compensation Issues
Revisiting Corporate Governance Regulation
This electronic newsletter is supported by the Corporation Service Company.
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Received on Tue May 19 2009 - 09:23:29 EDT
