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home » scholarly works » edition 4

4. Corporate Governance

What is corporate governance? How can large shareholders such as pension funds monitor and control the activities of management to limit the agency problem? Are they successful? These are some of the questions that this edition of Scholarly Works attempts to answer. In light of recent scandels in the financial industry, issues pertaining to corporate governance are becoming increasingly important.

Our Picks

Bertrand, Marianne & Mullainathan, Sendhil. (2001). Are CEOs Rewarded for Luck? The Ones without Principals Are. The Quarterly Journal of Economics, 116(3), 901-933. (pdf 8860kb)

Del Guercio, Diane & Hawkins, Jennifer. (1999). The Motivation and Impact of Pension Fund Activism. Journal of Financial Economics, 52, 293-340. (pdf 270kb)

Moeller, Thomas. (2005). Let’s Make a Deal! How Shareholder Control Impacts Merger Payoffs. Journal of Financial Economics, 76, 167-190. (pdf 5275kb)


Q & A

Question 1: Defining terms: What is corporate governance, the principal-agent problem, and agency costs?
Question 2: How do large shareholders monitor and control the activities of management to limit the agency problem?

  • Provider of information
  • Top executive turnover
  • Executive compensation
  • Exit
  • Question 3: What are the effects of institutional monitoring?
    Question 4: Where might there be a conflict of interest?

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