Do institutional investors engage with companies on corporate externalities such as greenhouse gas emissions? And if so, why? We study voting at shareholder meetings by two emblematic global investors: BlackRock, a major asset manager, and the Norway Fund, a responsible sovereign wealth fund. Our data cover 2014 and include the two institutions’ votes on 35,382 [...]
Boards sometimes cut a CEO’s pay following poor performance. This study examines whether such CEO paycuts really work. We identify 1,496 instances of large CEO paycuts during the period 1994-2013. We then create a propensity-score-matched control group of firms that did not cut their CEOs’ pay and employ a difference-in-differences approach to examine the consequences [...]
We examine the effect of unfavorable PCAOB inspection reports, which contain audit deficiencies related to GAAS and/or GAAP violations, on shareholder voting for the auditor ratification. We further investigate whether shareholders likely vote against ratification for the auditors receiving deficiency reports in a weak corporate governance environment. Overall, we do not find evidence that shareholders [...]
The European Commission established the EU High-Level Group on Sustainable Finance (HLEG) to help develop an overarching and comprehensive EU roadmap on sustainable finance. It requested advice on how to ‘steer the flow of capital towards sustainable investments; identify steps that financial institutions and supervisors should take to protect the financial system from sustainability risks; [...]
“The SDGs present an opportunity for business-led solutions and technologies to be developed and implemented to address the world’s biggest sustainable development challenges,” As noted in the SDG Compass. But if neither the corporate nor its capital providers can accurately and easily interpret information from Environmental, Social, and Governance (ESG) reporting, is ESG reporting really [...]
The research conducted as part of the Reporting Exchange project supports the existing argument that the variety and overlap of corporate reporting provisions make this field complicated and confusing 1,2. The research has allowed us to draw the conclusions outlined in this paper: • There are currently over 1000 reporting requirements for sustainability information, representing [...]
There is no consensus in the literature regarding what motivates firms to voluntarily publish corporate social responsibility (CSR) reports or who are the intended audiences of such reports. To help address this gap in the literature, I test whether the degree of information asymmetry between the firm and its owners is a significant factor contributing [...]
Concerns about the credibility of sustainability reports can be mitigated through assurance. Although audit committee remit encompasses monitoring of sustainability issues, there are potential complementary and substitution between governance mechanisms. This paper explores the relationship between audit committees and sustainability reporting assurance using resource dependency theory. We find audit committee characteristics have an impact, additional [...]
We examine the implication of executive gender on asset prices. Using a large sample of US public firms during 2006--2015, we find a negative association between female CFOs and future stock price crash risk. However, the impact of female CEOs on crash risk is not statistically significant. The results support the notion that CFOs play [...]
We use search volume index (SVI) for a CEO’s name and stock ticker from Google Trends to measure CEO publicity, and examine the competing hypotheses on its relation to tax avoidance. On the one hand, CEOs who receive more attention from retail investors may engage in tax evasion activities to meet investors’ performance expectations; on [...]
