Presentations on Women in Finance

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“Gender Diversity in the Art Market” 

My presentation on Gender Diversity in the Art Market.

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Women in Finance 

My talk on Women in Finance at the Swedish House of Finance

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"Women on boards: The superheroes of tomorrow?"


professor renee adams, finance, women in finance, gender research, female finance expert

My Publications

Women in the boardroom and their impact on governance and performance
Journal of Economics

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We show that female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, we find that female directors have better attendance records than male directors, male directors have fewer attendance problems the more gender-diverse the board is, and women are more likely to join monitoring committees.

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A theory of friendly boards

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We analyze the consequences of the board's dual role as advisor as well as monitor of management. Given this dual role, the CEO faces a trade‐off in disclosing information to the board: If he reveals his information, he receives better advice; however, an informed board will also monitor him more intensively.
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The role of boards of directors in corporate governance: A conceptual framework and survey

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This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Benjamin E. Hermalin and Michael S. Weisbach (2003) survey. The two questions most asked about boards are what determines their makeup and what determines their actions?
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Powerful CEOs and their impact on corporate performance

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Executives can only impact firm outcomes if they have influence over crucial decisions. On the basis of this idea, we develop and test the hypothesis that firms whose CEOs have more decision-making power should experience more variability in performance. Focusing primarily on the power the CEO has over the board and other top executives as a consequence of his formal position and titles, status as a founder, and status as the board’s sole insider, we find that stock returns are more variable for firms run by powerful CEOs. Our findings suggest that the interaction between executive characteristics and organizational variables has important consequences for firm performance.

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Is corporate governance different for bank holding companies?

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We analyze a range of corporate governance variables as they pertain to a sample of bank holding companies (BHCs) and manufacturing firms. We find that BHCs have larger boards and that the percentage of outside directors on these boards is significantly higher; also, BHC boards have more committees and meet slightly more frequently. Conversely, the proportion of CEO stock option pay to salary plus bonuses as well as the percentage and market value of direct equity holdings are smaller for bank holding companies. Furthermore, fewer institutions hold shares of BHCs relative to shares of manufacturing firms, and the institutions hold a smaller percentage of a BHC's equity. These observed differences in variables suggest that governance structures are industry-specific. The differences, we argue, might be due to differences in the investment opportunities of the firms in the two industries as well as to the presence of regulation in the banking industry.

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Board structure, performance and organizational structure: The case of bank holding companies

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The subprime crisis highlights how little we know about the governance of banks. This paper addresses a long-standing gap in the literature by analyzing board governance using a sample of banking firm data that spans 40 years. We examine both the relation between board structure (size and composition) and bank performance, as well as some determinants of board structure. We document that M&A activity influences bank board composition. We also provide new evidence that organizational structure is significantly related to bank board size. We argue that these factors may explain why we do not find that banking firms with larger boards underperform their peers in terms of Tobin’s Q. Our findings suggest caution in applying regulations motivated by research on the governance of non-financial firms to banking firms. Since organizational structure is not specific to banks, our results suggest that it may also be an important determinant for the boards of non-financial firms with complex organizational structures, such as business groups. 

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Beyond the glass ceiling: Does gender matter?

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A large literature documents that women are different from men in their choices and preferences, but little is known about gender differences in the boardroom. If women must be like men to break the glass ceiling, we might expect gender differences to disappear among directors. Using a large survey of directors, we show that female and male directors differ systematically in their core values and risk attitudes, but in ways that differ from gender differences in the general population. These results are robust to controlling for differences in observable characteristics. Consistent with findings for the population, female directors are more benevolent and universally concerned but less power oriented than male directors. However, in contrast to findings for the population, they are less tradition and security oriented than their male counterparts. They are also more risk loving than male directors. Thus, having a woman on …

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Understanding the relationship between founder–CEOs and firm performance

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We use instrumental variables methods to disentangle the effect of founder–CEOs on performance from the effect of performance on founder–CEO status. Our instruments for founder–CEO status are the proportion of the firm's founders that are dead and the number of people who founded the company. We find strong evidence that founder–CEO status is endogenous in performance regressions and that good performance makes it less likely that the founder retains the CEO title. After factoring out the effect of performance on founder–CEO status, we identify a positive causal effect of founder–CEOs on firm performance that is quantitatively larger than the effect estimated through standard OLS regressions. We also find that founder–CEOs are more likely to relinquish the CEO post after periods of either unusually low or unusually high operating performances. All in all, the results in this paper are consistent with a …

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Bank board structure and performance: Evidence for large bank holding companies

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The subprime crisis highlights how little we know about bank governance. This paper addresses a long-standing gap in the literature by analyzing the relationship between board governance and performance using a sample of banking firm data that spans 34 years. We find that board independence is not related to performance, as measured by a proxy for Tobin’s Q. However, board size is positively related to performance. Our results are not driven by M&A activity. But, we provide new evidence that increases in board size due to additions of directors with subsidiary directorships may add value as BHC complexity increases. We conclude that governance regulation should take unique features of bank governance into account.

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Governance and the Financial Crisis

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Should boards of financial firms be blamed for the financial crisis? Using a large sample of data on nonfinancial and financial firms for the period 1996–2007, I document that the governance of financial firms is,on average, not obviouslyworse than in nonfinancial firms. In fact, using simple governance scores and governance indices as measures, banks and nonbank financial firms generally appear to be better governed than nonfinancial firms. I also document that bank directors earned significantly less compensation than their counterparts in nonfinancial firms and banks receiving bailout money had boards that were more independent than in other banks. My results suggest that measures of governance that have been the focus of recent governance policies are insufficient to describe governance failures attributed to financial firms. Moreover, recent governance reforms may have to shoulder some of the blame …

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Gender diversity in the boardroom

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This paper documents several significant correlations between the variability of stock returns, the structure of director compensation, and the gender diversity of corporate boards. In a cross-sectional sample of boards of directors of 1024 publicly traded firms in fiscal year 1998, we find three robust results:(1) firms facing more variability in their stock returns have fewer women on their boards of directors,(2) firms with more diverse boards provide their directors with more pay-performance incentives, and (3) firms with more diverse boards hold more board meetings. We provide an explanation for these findings, based on the idea that board diversity affects directors’ incentives to work cooperatively. We also find that female directors have fewer attendance problems at board meetings, which suggests that diverse boards can be more effective than homogeneous boards.

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Do directors perform for pay?

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Many corporations reward their outside directors with a modest fee for each board meeting they attend. Using a large panel data set on director attendance behavior in publicly-listed firms for the period 1996–2003, we provide robust evidence that directors are less likely to have attendance problems at board meetings when board meeting fees are higher. This is surprising since meeting fees, on average roughly $1,000, represent an arguably small fraction of the total wealth of a representative director in our sample. Thus, corporate directors appear to perform for even very small financial rewards.

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One share-one vote: The empirical evidence

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We survey the empirical literature on disproportional ownership, i.e. the use of mechanisms that separate voting rights from cash flow rights in corporations. Our focus is mostly on explicit mechanisms that allow some shareholders to acquire control with less than proportional economic interest in the firm (dual-class equity structures, stock pyramids, cross-ownership, etc.), but we also briefly discuss other mechanisms, such as takeover defenses and fiduciary voting. We provide a broad overview of different areas in this literature and highlight problems of interpretation that may arise because of empirical difficulties. We outline potentially promising areas for future research.

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Shareholders and stakeholders: How do directors decide?

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This study examines how directors make decisions that involve shareholders and other stakeholders. Using vignettes derived from seminal court cases, we construct an index of directors' shareholderism as a general orientation on this issue. In a survey of the entire population of directors and CEOs in public corporations in one country, we find that directors' personal values and roles play an important part in their decisions. Directors and CEOs are more pro‐shareholder the more they endorse entrepreneurial values—specifically, higher achievement, power, and self‐direction values and lower universalism values. While employee representative directors exhibit a lower baseline level of shareholder orientation, they nonetheless often side with shareholders.

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Board structure and banking firm performance

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Unpublished paper, Federal Reserve Bank of New York

What do boards do? Evidence from board committee and director compensation data

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This paper uses data on 1542 board committees and director compensation in a sample of 352 Fortune 500 companies in 1998 to analyze variation in board behavior. I use this data to quantify the amount of effort boards devote to their three different functions: monitoring, dealing with strategic issues and considering the interests of stakeholders. I show that boards appear to take their traditional oversight role seriously, since on average boards devote effort primarily to monitoring. However, there is a fair amount of variation across firms in the amount of effort boards devote to their different functions. In particular boards of larger firms and firms that face more uncertainty devote relatively less effort to monitoring, while boards of diversified firms devote relatively more effort to monitoring. Boards of larger, growing and older firms devote more effort to stakeholder interests on both an absolute and a relative basis. Finally, boards of growing firms devote relatively more effort to strategic issues.

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Board diversity: Moving the field forward

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Board diversity represents both challenges and opportuni-ties for board practice and research. It is possible to distinguish between task-related diversity, such as educational or functional background, non-task-related diversity, such as gender, age, race, or nationality, as well as structural diversity, ie, board independence and CEO non-duality. Diversity can have both benefits and costs. Regardless of its effects, diversity has been the subject of active policy making which makes it even more important to understand the role it plays. Diversity can have positive effects on board performance. A growing body of research suggests that board member diversity brings unique perspectives to boards (eg, Arfken, Bellar & Helms, 2004; Van der Walt, Ingley, Shergill, & Townsend, 2006). If individual private information is valuable and not fully correlated across board members, a more diverse board will collectively possess …

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Does gender matter in the boardroom? Evidence from the market reaction to mandatory new director announcements

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Around the world, policy makers are mandating gender quotas for boards of publicly-traded firms. Since the benefits and costs of these quotas accrue to shareholders, it is important to see how they react to the appointment of female directors. Using data on mandatory announcements of new director appointments, we find that the gender of directors appears to be value-relevant. On average, shareholders value additions of female directors more than they value additions of male directors. Firms with workplace practices in place to promote workplace equality appear to benefit the most from boardroom gender diversity. This suggests that appointing female directors may help resolve value-decreasing stakeholder conflicts.

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Women on boards: The superheroes of tomorrow?

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Can female directors help save economies and the firms on whose boards they sit? Policy-makers seem to think so. Numerous countries have implemented boardroom gender policies because of business case arguments. While women may be the key to healthy economies, I argue that more research needs to be done to understand the benefits of board diversity. The literature faces three main challenges: data limitations, selection and causal inference. Recognizing and dealing with these challenges is important for developing informed research and policy. Negative stereotypes may be one reason women are underrepresented in management. It is not clear that promoting them on the basis of positive stereotypes does them, or society, a service.

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Lehman sisters

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Based on documented population gender differences in risk aversion, some argue the crisis would not have happened if Lehman Brothers had been Lehman Sisters. Such generalizations from the population ignore the role of selection. We illustrate the importance of selection by comparing finance to other industries. Using measure of preferences, we show that gender gaps in risk-aversion can reverse in finance. Consistent with the existence of selection, financial firms with more female directors are, if anything, relatively riskier than non-financials. While diversity may be valuable in a crisis, taking selection into account may be critical for identifying the reasons why.

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Identifying the effect of managerial control on firm performance

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Using a unique sample, we attempt to identify the consequence of the separation between inside ownership and control for firm performance. We exploit the fact that banking institutions may hold their own shares in trust to construct a clean measure of the wedge between inside voting control and cash flow rights. These shares provide managers with no monetary incentives, since their dividends accrue to trust beneficiaries. However, managers may have the authority to vote these shares. Contrary to the belief that managerial control is purely detrimental, we find that it has positive effects on performance over at least some range.

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Asking directors about their dual roles

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This paper uses a large survey of directors to investigate variation in directors' dual roles as advisors and monitors of management. I examine whether the advisory role encourages information exchange between the CEO and the board, as suggested by Adams and Ferreira (2007). I also examine factors related to directors' perceptions of their roles. Amongst others the data suggests that a) directors vary in their perceptions of their roles and directors' roles affect their perceptions of information exchange, b) directors who agree more that they primarily monitor management perceive that they participate less in boardroom discussion than directors who agree that the CEO often asks them for advice, c) directors with a stronger personal relationship with management perceive their advisory role to be more important, and d) directors on boards with more decision-making power perceive their monitoring role to be less important relative to their advisory role. The results are robust to using Heckman selection techniques to address nonresponse bias. Overall, the data suggests that monitoring alone may not be sufficient for good governance.

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Regulatory pressure and bank directors’ incentives to attend board meetings

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The primary way in which directors obtain necessary information is by attending board meetings. Bank directors, in particular, are strongly urged to attend meetings by regulators. We investigate whether such pressure is sufficient for bank directors to have good attendance records. Using data on whether directors were named in proxy statements as attending fewer meetings than they were supposed to, we find that (1) bank directors appear to have worse attendance records than their counterparts in nonfinancial firms, (2) their attendance behavior is related to explicit and implicit incentives for attendance, and (3) past attendance records are not related to the likelihood a director departs the board. Our results suggest that explicit and implicit incentives may provide important complements to regulatory pressure in influencing director behavior.

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Moderation in groups: Evidence from betting on ice break-ups in Alaska

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We use a large sample of guessed ice break-up dates for the Tanana River in Alaska to study differences between outcomes of decisions made by individuals versus groups. We estimate the distribution of guesses conditional on whether they were made by individual bettors or betting pools. We document two major distinctions between the two sets of guesses: (1) the distribution of guesses made by groups of bettors appears to conform more to the distribution of historical break-up dates than the distribution of guesses made by individual bettors, and (2) the distribution for groups has less mass in its tails and displays lower variability than the distribution for individuals. We argue that these two pieces of evidence are consistent with the hypothesis that group decisions are more moderate, either because groups have to reach a compromise when their members disagree or because individuals with extreme …

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Director skill sets

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Directors are not one-dimensional. We characterize their skill sets by exploiting Regulation S-K's 2009 requirement that U.S. firms must disclose the experience, qualifications, attributes, or skills that led the nominating committee to choose an individual as a director. We then examine how skills cluster on and across boards. Factor analysis indicates that the main dimension along which boards vary is in the diversity of skills of their directors. We find that firm performance increases when director skill sets exhibit more commonality.

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Diversity and incentives: evidence from corporate boards

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This paper documents several significant correlations between the variability of stock returns, the structure of director compensation and the diversity of corporate boards, as proxied by their gender composition. In a cross-sectional sample of boards of directors of 1462 publicly traded firms in fiscal year 1998, we find two robust results:(1) firms facing more variability in their stock returns have fewer women on their boards of directors, and (2) firms with more diverse boards provide their directors with more pay-performance incentives. We provide an explanation for these findings based on the idea that board diversity affects directors’ incentives to work cooperatively. We also discuss alternative theories and their consistency with the data.

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Women on boards in finance and STEM industries

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We document that women are less represented on corporate boards in Finance and more traditional STEM industry sectors. Even after controlling for differences in firm and country characteristics, average diversity in these sectors is 24% lower than the mean. Our findings suggest that well-documented gender differences in STEM university enrolments and occupations have long-term consequences for female business leadership. The leadership gap in Finance and STEM may be difficult to eliminate using blanket boardroom diversity policies. Diversity policies are also likely to have a different impact on firms in these sectors than in non-STEM sectors.

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Barriers to boardrooms

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Boardroom diversity policies link societal and corporate governance objectives. To understand whether they can meet both objectives, we argue one must understand why female directors are relatively underrepresented. We document that boardroom diversity is lower than most surveys suggest. We then show that across countries and US states there are more women in the director pool when more women work full time. However, working full-time may not be sufficient for women to make it to the top because of economic and cultural barriers. Our evidence suggests current boardroom diversity policies may be less effective when barriers to boardrooms are bigger.

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Making it to the top: From female labor force participation to boardroom gender diversity

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The barriers to female representation in management are analogous to the barriers to female labor force participation. Accordingly, we examine whether low labor force participation is the main reason few women sit on corporate boards in 22 countries from 2001-2010. We show that boardroom diversity is actually worse than most surveys suggest. We then show that full-time female labor force participation is positively related to the representation of women on boards. However, working full-time may not be sufficient for women to make it to the top. Instead, economic and cultural barriers to female career advancement appear to exist.

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The dual role of corporate boards as advisors and monitors of management: Theory and evidence

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This paper analyzes the consequences of the board's dual role as an advisor as well as a monitor of management in the context of both a sole board system such as in the United States and the dual board system such as in various countries in Europe. As a result of this dual role the manager in a sole board system faces a tradeoff concerning the amount of information he discloses to the board. On the one hand if he reveals his information he gets better advice. On the other hand the board may change its opinion of his ability on the basis of his information. The model shows that the board may choose to pre-commit to reduce its monitoring of the manager in order to encourage the manager to share his information. I derive implications for the optimal monitoring intensity of the board as a function of managerial ownership and the manager's career concerns and test them in a cross section of Fortune 500 firms. The empirical evidence is consistent with the model's prediction that monitoring first decreases and then increases as ownership and tenure increase.

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Governance of banking institutions

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Bank governance has been blamed to varying degrees for the recent financial crisis. For example, the Organisation for Economic Co-operation and Development (OECD) Steering Group on Corporate Governance argues that board failures in financial firms are a major cause of the financial crisis (Kirkpatrick 2009) and has launched an action plan to improve their governance. Similarly, the UK government has commissioned a former financial services regulator, Sir David Walker, to recommend measures to improve board-level governance at banks. In the United States, outrage over levels of executive pay at financial firms has led Congress to enact restrictions on pay for financial firms receiving funds from the government under the Troubled Asset Relief Program. These developments highlight the importance, both for research and policy making, to review the current state of bank governance.

This chapter focuses …

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Strong managers, weak boards?

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Many governance reform proposals are based on the view that boards have been too friendly to executives, for example, by awarding them excessive pay. Although boards are often on friendly terms with executives, it is less clear that they have systematically failed to function in the interests of shareholders. Understanding board monitoring requires a theory of boards that takes into account how firms provide incentives for their Chief Executive Officer's (CEOs) through other means. We develop a model in which a CEO's ownership stake and private benefits have opposite effects on his willingness to share private information with an independent board of directors. To encourage the CEO to communicate, the board may optimally commit to a low monitoring intensity when either CEO ownership is low or private benefits are high. Our model suggests that the existing cross-section evidence on the correlation …

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Are CEOs born leaders? Lessons from traits of a million individuals

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What makes a successful CEO? We combine a near-exhaustive sample of male CEOs from Swedish companies with data on their cognitive and noncognitive ability and height at age 18. CEOs differ from other high-skill professions most in noncognitive ability. The median large-company CEO belongs to the top 5% of the population in the combination of the three traits. The traits have a monotonic and close to linear relation with CEO pay, but their correlations with pay, firm size, and CEO fixed effects in firm policies are relatively low. Traits appear necessary but not sufficient for making it to the top.

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Boards, and the directors who sit on them

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Boards of directors are intellectually interesting; the literature on boards has academic impact and there is substantial scope for this literature to have policy impact. I illustrate these points by combining a select review of the literature with evidence from a variety of data sets. Boards are difficult to study—which makes them intellectually interesting. Papers on boards are cited 52.2% more per year since publication than other finance papers (controlling for year of publication and the number of papers published in the same year)—which makes them impactful. Boards are the focus of a substantial amount of policy-making—which means there is scope for the board literature to have policy impact. Although the literature on boards has grown substantially in recent years, I highlight that many topics for future research remain. Most importantly, I argue that to understand boards we need to understand the people who sit on …

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Is bank holding company governance different

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Is pay a matter of values?

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Public outrage over executive compensation reached an all‐time high during the financial crisis. Around the world, many argued that CEOs and boards were immoral in setting their pay and pressured governments to impose restrictions on executive pay. Using a unique sample of data on human values for CEOs, we show that CEOs and directors have different values than general members of the population. CEOs and directors place more emphasis on power and achievement values than members of the population, and they emphasize self‐direction values more. However, values appear to have little explanatory power for pay, in contrast to economic variables. While some CEOs may be unethical in setting their pay, our results suggest that pay is not a matter of values on average.

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Family, values, and women in finance

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About 18% of Chartered Financial Analyst (CFA) members are women, which is well below the percentage of workers who are women around the world. To gain insights into why women represent a relatively low percentage of investment professionals, we survey the 2016 CFA membership, which consists of about 135,000 members in 151 countries. We document that female CFA members are less tradition and conformity-oriented and more achievement-oriented than both male CFA members and women in the general population. This suggests that gender-specific barriers discourage women from entering the CFA professions. One possible barrier is that finance is a profession that disproportionately rewards those who work long and inflexible hours. Women face greater time obligations outside of work. Thus female CFA members express a stronger desire to recapture time from work than male CFA members. Woman CFA members desire more time outside of work when they are married, have children, or are older and value tradition. In sharp contrast to these results, family circumstances and valuing tradition do not affect male CFA members’ desire for more time.

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Death by committee?

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The handbook of the economics of corporate governance

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The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. Concentrates on underlying principles that change little, even as the empirical literature moves on Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field’s substantive findings, all of which help point the way forward.

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Bankers on Fed Boards: Is Good News for the Banks Bad News for the Fed?

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Bankers and non-bankers sit on Federal Reserve Bank Boards. In the case of banks, this may create a perception problem since the Fed supervises banks. I examine who sits on Reserve Bank boards and the market reaction to director appointments during the period 1990-2009. I document that Fed directors from the banking industry typically work for large banks. Furthermore, the average market reaction to the appointment of a firm’s officer to a Reserve Bank board is positive only for banks. My results are consistent with the idea that the Fed’s governance structure may continue to expose it to reputation risk.

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Foreword to special issue: governance, policy and the crisis

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The purpose of the two volumes of this special issue on governance, policy, and the crisis is to grapple with some of the questions that arise about the relationship between firm-level governance and policy making around the crisis. Many blame poor firm-level corporate governance for the financial crisis. Senators Cantwell and Schumer’s proposed Shareholder Bill of Rights states that ‘... among the central causes of the financial and economic crisis that the United States faces today has been a widespread failure of corporate governance’(Cantwell and Schumer 2009, Section 2). The Organisation for Economic Co-operation and Development (OECD) Steering Group on corporate governance identifies weak governance as a major cause of the financial crisis (Kirkpatrick 2009; OECD Steering Group on Corporate Governance 2010), and places much of the blame on board failures in financial firms, in particular. 1 In …

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Myths and Facts about Female Directors

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Women in the workforce are key to healthy economies, but this does not mean that adding more women to the board will necessarily increase shareholder value or that the financial crisis would not have happened if Lehman Brothers had been Lehman Sisters. Negative stereotypes may be one reason women are underrepresented in management and on the boards. But are women better served if we promote them on the basis of positive stereotypes? In this paper, Renée Adams draws on current research to debunk popular myths about boardroom gender diversity.

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Women in finance

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Across countries, banks have less gender diverse boards than other firms. Bank board diversity is particularly low in countries with greater gender gaps in PISA math scores and lower average math scores. We find similar results using state-level NAEP math scores in the United States. The influence of math scores appears to transcend standard cultural explanations. Female directors are more likely to have an MBA in banks, especially in countries with greater gender gaps in math scores. Our evidence suggests that differences in educational outcomes for boys and girls may have long-lasting implications for their career development.

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Governance characteristics and the market reaction to the SEC's proxy access rule

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We examine the wealth effects of the Security and Exchange Commission's (SEC) recent proxy access rule to facilitate director nominations by shareholders. We focus on how a firm's governance characteristics affect the market reaction to the rule. We find more negative announcement effects for firms with high probabilities of being targeted by shareholders. The announcement effects of the proxy access rule are positively related to the fraction of independent directors and the ratio of non‐cash‐based compensation, while announcement effects are inversely correlated with board size. Our findings suggest that the marginal shareholder does not perceive the proposed rule as value increasing.

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Research methodology of governance studies: Challenges and opportunities

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A theory of friendly boards

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Board structure and bank holding company performance

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Is gender in the eye of the beholder? Identifying cultural attitudes with art auction prices

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In the secondary art market, artists play no active role. This allows us to isolate cultural influences on the demand for female artists’ work from supply-side factors. Using 1.5 million auction transactions in 45 countries, we document a 47.6% gender discount in auction prices for paintings. The discount is higher in countries with greater gender inequality. In experiments, participants are unable to guess the gender of an artist simply by looking at a painting and they vary in their preferences for paintings associated with female artists. Women's art appears to sell for less because it is made by women.

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Do Directors Perform for Pay?

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Many corporations reward their outside directors with a modest fee for each board meeting they attend. Using two non-overlapping data sets on director attendance behavior, we provide robust evidence that directors are less likely to have attendance problems at board meetings when board meeting fees are higher. This is suprising since meeting fees, on average roughly $1,200, represent an arguably small fraction of the total wealth of a representative director in our samples. Thus, corporate directors appear to perform for even very small financial rewards. We also find that firms that do not pay meeting fees appear to pay each of their directors approximately $40,000 more than firms that pay meeting fees. This suggests that firms that ignore meeting fees as an incentive device have a tendency to overpay their directors.

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Corporate Governance-Is Policy Effective?

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Women in the boardroomand their impact on governance and performance

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The Math Gender Gap and Women's Career Outcomes

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We show the math gender gap is related to women’s career outcomes using international geographic data on the investment profession, a math-intensive and 80% male profession. The math gender gap predicts the proportion of investment professionals who are women across countries and across states. Female labor force participation, gender inequality measures, competition attitudes, and gender preferences do not explain the math gender gap as a predictor of women’s career outcomes. Our results suggest societal factors exist that either directly affect the math training of women or jointly affect the math gender gap and women’s career outcomes. Addressing these societal factors can decrease the math gender gap and increase the representation of women in highly quantitative fields like finance, which might help to reduce the gender pay gap since quantitative fields like finance tend to be highly paid.

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Unsuccessful Teams

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The consequences of failed teamwork may not be shared equally if more blame is allocated to team members for whom performance expectations are ex ante low---a phenomenon called attributional rationalization. Using the mutual fund industry as our laboratory, we provide evidence that attributional rationalization has important labor market consequences. Following fund closures, female team managers are more likely to exit the fund family and the industry than male team managers. This result is not driven by a gender gap in skill. Attributional rationalization helps explain why the fraction of female fund managers declined by 3.8% between 1999 and 2015.

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The ABCs of empirical corporate (governance) research

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Manuscript Type. Commentary. Research Question/Issue. I ask how academics can do better empirical research in corporate governance and other fields. Research Findings/Insights. I argue that academics can do better research by using old methods better. I provide a list of recommendations I label as ABCs as a reminder that one can write excellent papers if one gets the basics right. The ABCs also serve as a reminder that one must master the basics before one can credibly use new techniques. Theoretical/Academic Implications. Following the recommendations I provide can improve research by making the research more transparent and easier to replicate. Practitioner/Policy Implications. Better research improves policy‐making and practice, especially if improvements in research practices lead to research that is easier to read.

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Introduction to Chapter 23 of Corporate Governance: Governance of Banking Institutions

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This chapter documents some little known features of bank governance involving bank boards and describes regulation and laws that are likely to influence bank governance. It also describes how organizational form and activities of banks may influence bank boards and provides some new evidence on these influences. The chapter points out some potential problems with the measurement of CEO compensation and ownership structures in banking. A main conclusion is that applying governance standards developed from the study of nonfinancial firms to banks is unlikely to improve bank governance.

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H.(2005). Corporate performance, board structure and its determinants in the banking industry

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Four essays in corporate governance

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Shareholders and Stakeholders around the World: The Role of Values, Culture, and Law in Directors’ Decisions

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This study sets out to examine the relative importance of formal (legal) versus informal (cultural) institutions and personal values for strategy and corporate governance. We present first evidence on the way personal and institutional factors guide public company directors in decision-making concerning shareholders and stakeholders. In a sample comprising more than nine hundred directors from over fifty countries of origin, we confirm that directors universally hold a principled, quasi-ideological stance towards shareholders and stakeholders, called shareholderism. Directors’ shareholderism correlates systematically not only with personal values but also with cultural norms that are consistent with entrepreneurship. Among legal factors, only creditor protection exhibits a negative correlation with shareholderism, as theory would suggest, while general legal origin and proxies for shareholder and employee protection are unrelated to it. Personal values and cultural norms thus appear to dominate legal rules in shaping directors’ shareholderism stances.

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Death by Committee? An Analysis of Corporate Board (Sub-) Committees

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Theoretical models on group decision-making suggest that sub-group usage can affect communication among members and decision quality. To examine the trade-offs from forming sub-groups, we assemble a detailed dataset on corporate boards (groups) and committees (sub-groups). Boards have increasingly used committees staffed entirely by outside directors. Twenty percent of all director meetings occurred in such committees in 1996; this increased to over forty percent by 2010. We find evidence that such committee usage can erect barriers to communication and impair decision-making. Sub-groups are relatively understudied, but our results suggest that they play an important role in group functioning.

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STEM Parents and Women in Finance

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“STEM parents” refers to parents who work in a science, technology, engineering, or mathematics field. Using survey data from CFA Institute members, we show that parental careers differentially affect the future career choices of girls and boys. Among CFA Institute members, women are more likely to have a STEM parent (particularly a STEM mother) than men. Relative to the base rates at which girls and boys become CFA Institute members, STEM mothers increase the girls’ rate by 48% more than the boys’ rate; STEM fathers increase the girls’ rate 29% more than the boys’ rate. Our findings are consistent with the hypothesis that early role models, particularly female role models, influence women’s choice of a finance career.

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What do bankers know?

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We examine insider trades of bankers as a measure of how much they know relative to outsiders. In contrast to trades of insiders in non-financial firms, trades by bankers are less informative. Although bankers are relatively better at timing their sales, they earn negative long-run abnormal returns on their purchases. This is in marked contrast to insiders in non-financial firms. Even though banks are supposedly more opaque during the crisis, bank insider trades are still relatively uninformative during this period. These results are not driven by differences in idiosyncratic volatility, firm size, governance and compensation structures or routine versus opportunistic trades. Our results suggest that even if banks are transparent according to many standard measures, they are difficult to understand—even for insiders.

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Empirical Corporate Finance

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Leave Room for Growth

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Financial regulation: what the finance industry wants and how it gets it

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We construct a new measure of finance industry policy preferences from letters sent by finance trade associations to Congress. Using 1142 bills scheduled for consideration in Congress between 1998 and 2018, we show that the industry uses a multi-faceted lobbying approach to achieve outcomes that are in line with its stated policy preferences. When finance trade associations jointly lobby for a bill, Congress members are more likely to co-sponsor and vote pro-finance. This effect is significantly smaller when consumer groups express opposition. Congress members receiving relatively more campaign contributions from the finance industry are more responsive to messages from finance trade associations and their votes deviate more from their parties’ average position on the bill.

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Editorial Statement-Finance

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Is gender in the eye of the beholder? Identifying cultural attitudes with art auction prices

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Global Value Chains in a Changing World

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Gender Diversity in Investment Management: New Research for Practitioners on How to Close the Gender Gap

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In the last year, CFA Institute, along with many professional organizations, began to look more closely at the composition of its membership. We found a surprising number: Women represent less than one in five CFA® charterholders.

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SWIFT INSTITUTE

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Across countries, banks have less gender diverse boards than other firms. Bank board diversity is particularly low in countries with greater gender gaps in PISA math scores and lower average math scores. We find similar results using state-level NAEP math scores in the United States. The influence of math scores appears to transcend standard cultural explanations. Female directors are more likely to have an MBA in banks, especially in countries with greater gender gaps in math scores. Our results suggest that low female participation in STEM and finance fields has important consequences for corporate leadership structures in STEM and finance industries. To ensure that the best managerial talent is in charge of firms, it may not be enough to ask or mandate firms to have more women on their board. Board diversity policies may need to be adapted to industry circumstances. They may also need to be complemented by policies that ensure more equal education outcomes for girls and boys.

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JFSR Referees 2013

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Governance and the Financial Crisis: More Convergence, Less Risk?

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Based on measures of world industrial output, world trade and stock markets, Eichengreen and O’Rourke (2009) argue that the current financial crisis may be worse than the Great Depression on a global scale. Perhaps no one would have been surprised if a crisis of this magnitude originated in an emerging market. Bordo and Eichengreen (2003) provide evidence that most financial crises occur in emerging markets. They describe 139 financial crises between 1973 and 1997, 95 of which occurred in emerging market countries.

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Outside director appointments and director-firm match

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Adams, R, Gray, S & NOWLAND, JE 2010, 'Outside director appointments and director-firm match' Paper presented at Financial Management Association Asian conference 2010, Singapore, 14/07/10 - 16/07/10 … Adams, R., Gray, S., & NOWLAND, JE (2010). Outside director appointments and director-firm match. Paper presented at Financial Management Association Asian conference 2010, Singapore … Adams R, Gray S, NOWLAND JE. Outside director appointments and director-firm match. 2010. Paper presented at Financial Management Association Asian conference 2010, Singapore … Adams, Renee ; Gray, Stephen ; NOWLAND, John Edward. / Outside director appointments and director-firm match. Paper presented at Financial Management Association Asian conference 2010, Singapore.

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The Role of Boards of Directors in Corporate Governance: A Conceptual Framework &amp

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This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Hermalin and Weisbach (2003) survey. The two questions most asked about boards are what determines their makeup and what determines their actions? These questions are fundamentally intertwined, which complicates the study of boards due to the joint endogeneity of makeup and actions. A focus of this survey is on how the literature, theoretical as well as empirically, deals—or on occasions fails to deal—with this complication. We suggest that many studies of boards can best be interpreted as joint statements about both the director-selection process and the effect of board composition on board actions and firm performance.

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Corporate governance in the 2007-2008 financial crisis: Evidence from financial institutions worldwide.

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Guidelines and instructions for OECD symposium.

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Information markets and the comovement of asset prices.

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Review of Experience and the Rationality of Theistic Beliefby Jerome Gellman

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Kicking footedness and movement discrimination by AFL footballers


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Kicking a football accurately over a desired distance is dependent upon the speed of the kicking foot and the quality of contact between the foot and ball. Control of the swinging leg and the ability to make fine discriminations of the leg's segments is critical to these factors and the overall performance of the kick. Control of a limb requires interpreting information from proprioceptors of the entire limb. Discrimination of movement at the ankle (Waddington & Adams 1999) and knee (Waddington et al 2000) has previously been assessed using an automated device. Control of the swinging leg was assessed in 20 Australian Football League players, by using this device to determine movement extent discrimination of the leg in a kick-like motion. The device accurately sets a stop plate to five different positions and each subject was asked to swing the leg to the plate, and make a non-visual judgment of the movement extent …

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Gender Diversity in Investment Management: New Research for Practitioners on How to Close the Gender Gap

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In the last year, CFA Institute, along with many professional organizations, began to look more closely at the composition of its membership. We found a surprising number: Women represent less than one in five CFA® charterholders. Why would this be?

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Economic Policy Review Executive Summaries

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Museum & Gold Tour Regional Economy Data & Statistics Careers Blog Press Center. New York Fed Logo. Menu. About the New York Fed. About the New York Fed; What We Do. Fedpoints; Annual Reports; History; Holiday Schedule. Governance. Federal Reserve Board; Board of Directors; Bank Leadership; Ethics and Conflicts of Interest; Disclosures; Org Chart. Diversity and Inclusion; Advisory Groups; Events; Vendor Information; Working within the Federal Reserve System, the New York Fed implements monetary policy, supervises and regulates financial institutions and helps maintain the nation's payment systems. Information Requests Do you have a Freedom of Information request? Learn how to submit it. Gold Vault See the world's largest accumulation of gold as you learn about the New York Fed and Federal Reserve System on a free tour. Annual Report …

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Charles A. Dice Center for Research in Financial Economics

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This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Hermalin and Weisbach (2003) survey. The two questions most asked about boards are what determines their makeup and what determines their actions? These questions are fundamentally intertwined, which complicates the study of boards because makeup and actions are jointly endogenous. A focus of this survey is how the literature, theoretical as well as empirically, deals—or on occasions fails to deal—with this complication. We suggest that many studies of boards can best be interpreted as joint statements about both the director-selection process and the effect of board composition on board actions and firm performance.

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