Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences

Product Author Bios

David Larcker (Portola Valley, CA) directs the Corporate Governance Research Program at the Stanford Graduate School of Business, co-directs Stanford's Arthur and Toni Rembe Rock Center for Corporate Governance, and holds the James Irvin Miller Professorship and Jaedicke Faculty Fellowship. He served as Ernst & Young Professor of Accounting at The Wharton School, and as Professor of Accounting and Information Systems at Northwestern's Kellogg Graduate School of Management.

Brian Tayan (Trinity Park, CA), Corporate Governance Research Program Case Writer, holds an MBA from Stanford Graduate School of Business and a BA from Princeton.

Larcker and Tayan have co-authored several case studies.

Corporate Governance Matters gives corporate board members, officers, directors, and other stakeholders the full spectrum of knowledge they need to implement and sustain superior governance. Authored by two leading experts, this comprehensive reference thoroughly addresses every component of governance. The authors carefully synthesize current academic and professional research, summarizing what is known, what is unknown, and where the evidence remains inconclusive. Along the way, they illuminate many key topics overlooked in previous books on the subject. Coverage includes:

• International corporate governance.
• Compensation, equity ownership, incentives, and the labor market for CEOs.
• Optimal board structure, tradeoffs, and consequences.
• Governance, organizational strategy, business models, and risk management.
• Succession planning.
• Financial reporting and external audit.
• The market for corporate control.
• Roles of institutional and activist shareholders.
• Governance ratings.

The authors offer models and frameworks demonstrating how the components of governance fit together, with concrete examples illustrating key points. Throughout, their balanced approach is focused strictly on two goals: to “get the story straight,” and to provide useful tools for making better, more informed decisions.

Table of Contents

Preface     xv

Chapter 1  Introduction to Corporate Governance     1

Chapter 2  International Corporate Governance     23

Chapter 3  Board of Directors: Duties and Liability     67

Chapter 4  Board of Directors: Selection, Compensation, and Removal     93

Chapter 5  Board of Directors: Structure and Consequences     127

Chapter 6  Organizational Strategy, Business Models, and Risk Management     169

Chapter 7  Labor Market for Executives and CEO Succession Planning     203

Chapter 8  Executive Compensation and Incentives     237

Chapter 9  Executive Equity Ownership     287

Chapter 10 Financial Reporting and External Audit     325

Chapter 11 The Market for Corporate Control     361

Chapter 12 Institutional Shareholders and Activist Investors     393

Chapter 13 Corporate Governance Ratings     433

Chapter 14 Summary and Conclusions     459

Index     467