For decades, advocates of “shareholder primacy” as the North Star of corporate governance have steered our leading corporations and our Nation’s economic engine perilously off-course. Since the 1970s, when the work of Milton Friedman, Michael Jensen, and Frank Easterbrook took hold in business schools, activists and raiders in high-profile proxy fights and hostile
The CLS Blue Sky Blog
Latest from The CLS Blue Sky Blog - Page 8
Governance Implications of the Latest DOJ Corporate Fraud Enforcement Policies
Corporate boards will be called upon to renew their oversight of corporate compliance following the recent announcement of several new corporate fraud enforcement initiatives by the U.S. Department of Justice (DOJ). Most notably, these include a new whistleblower program and the expectation that effective compliance programs will monitor the risks of companies’ misuse of emerging…
Biased Boards
How do directors add value to corporations, and what are their incentives? They add value through monitoring and advising management – although monitoring seems to have taken precedence in the wake of high-profile financial scandals. As for directors’ incentives, the answer is less straightforward. While director compensation has increased in recent years, non-pecuniary incentives remain…