Publications

Experienced analysts help mitigate return anomalies. Our results suggest that experienced analysts primarily reduce accrual mispricing through monitoring.

This chapter examines the relationship between corporate governance and corporate fraud with a focus on internal and external governance characteristics and how they affect the likelihood of fraud. The chapter also examines the evidence on governance-related changes in firms affected by fraud.

We examine directors’ skill diversity, through Regulation S-K’s requirements, and report that skill diversity varies across boards. Greater commonality in skill sets correlates with improved firm performance.

In 2009, the Securities and Exchange Commission (SEC) reformed shareholder voting by eliminating uninstructed broker voting in director elections. We use this reform as a quasi-natural experiment to assess the value of shareholder empowerment. Using different control groups and various cross-sectional tests, we find that the reform did not increase average equity values.

We analyze 3677 European IPOs from 1998 to 2012. When Member States in the EU implemented governance codes like SOX, IPO underpricing decreased on their regulated markets compared to exchange-regulated ones. Improved governance enhances transparency and reduces information asymmetries in IPO valuations.

We compare accelerated share repurchases (ASR) and open market repurchases (OMR) between 2004 and 2007. ASR firms had lower market-to-book ratios, less cash, and higher managerial entrenchment. ASR firms were subject to more takeover rumors, influencing their choice. ASR firms experienced positive returns and reduced takeover probability.

Companies using search firms for board members pay CEOs higher salaries and total compensations. Such companies are less likely to fire CEOs after poor performance and more likely to engage in M&A with low returns. Using geographic distance as an instrument, we find search firm-identified directors negatively impact firm performance and governance.

Higher firm leverage is linked to higher employee wages in both the United States and the Netherlands. This effect is strongest in the 21st century in the United States, reflecting the impact of higher unemployment rates.

Analyzing Australian companies’ stock repurchases based on their motivations, we find that firms with undervaluation motives have a more positive stock price reaction. These firms repurchase fewer shares and perform better in the year following repurchases. Undervaluation motives signal strength, and management statements hold value for the market.

We analyze the SEC’s proxy access rule and its impact on shareholder wealth focusing on firms’ governance characteristics. Firms with a high probability of being targeted have more negative returns while independent directors and non-cash compensation positively influence the market’s reaction. Smaller boards have less negative impact, suggesting the rule isn’t seen as value-enhancing by marginal shareholders.