Family Control and Corporate Innovation in Stakeholder-Oriented Corporate Governance

This study investigates the effects of family control on corporate innovation activity in publicly traded firms in Japan under stakeholder-oriented corporate governance. In a sample of 14,991 firm-year observations in publicly traded firms in Japan during the period 2007 to 2016, we tested whether family owners or board members are enhancing research and development investments. While theoretical perspectives of principal–principal conflicts generally assume a negative relationship between family control and research and development intensity, we find a positive relationship, which supports the stewardship theory perspective. Additionally, we find that main bank ownership positively moderates the relationship between family control and research and development, suggesting that the main bank could affect the decision-making of family board members in the long-term. This result is supported by the close relationships between the main bank and client firms. Furthermore, our study reveals that the shareholder orientation of foreign shareholders suppresses family board members’ long-term orientation. We conclude that the exploitation presumed by principal–principal conflict perspectives has not been thoroughly investigated in Japan’s stakeholder-oriented corporate governance system.

Governance and corporate control in the United States

This paper provides an overview of business entities in the United States. We analyze current trends in the ownership structures of U.S. firms, diversity and inclusion, mergers and acquisitions, minority shareholder rights protections, and review the literature related to corporate ownership and financial performance. With the shift in the U.S. from defined benefit pension plans to defined contribution plans and a desire for increased corporate governance, we observe a significant increase in the financial assets under management by large institutional investors. It is believed these large institutional investors can have a significant impact on the governance, decision-making, and performance of the U.S. publicly traded firms. We observe an increasing trend in foreign indirect investment in the U.S. from countries in Europe, Asia and the Pacific Rim, North and South America, the Middle East, and Africa. Additionally, increased compensation of publicly traded firms’ top executives is shown, which has resulted in an increased disparity between the compensation of top management teams and the firms’ hourly employees. Lastly, we expect the suggested bias against women and other minorities, as evidenced here, will be lessened in the future and should result in improved financial performance for firms

Family Versus Institutional Involvement in Restructuring: Evidence From the Communications Equipment Industry

The prospect of restructuring can be seen as a mixed gamble that creates tensions between family owners and institutional investors in publicly traded firms. Both sides diverge in their reference points as family owners will pursue noneconomic goals, while institutional owners will pursue economic goals. We develop and test arguments to predict how resistance from family owners and support from institutional owners affect a firm’s restructuring. Using panel data from 1990 to 2004, the findings support our predictions and show that family owners can achieve both economic and noneconomic goals post-restructuring.

The Curse of Extremes: Generalist Career Experience and CEO Initial Compensation

Studies argue that generalist CEOs are more valued by the market for executive labor and receive higher initial compensation. Challenging this prevailing assumption, we acknowledge the drawbacks of extensive career mobility and predict an inverted U-shape relationship between CEO generalist career experience and CEO initial compensation. Integrating the generalism and specialization views of human capital, we postulate that at an initial level, the acquisition of experience breadth from different firms and industries enables CEOs to broaden their knowledge base, obtain a variety of skills, and thus increase their labor market value and initial compensation. After a threshold, however, the accumulation of extensive levels of career generalism through frequent job hopping across firm and industry contexts gradually causes a lack of experience depth and insufficient career specialization, thereby triggering lower CEO market value and initial pay. Data from 197 CEO appointments in large, publicly traded firms support our predictions. Our results also show that the observed inverted U-shape relationship varies with factors nested at different layers of context, highlighting the contingent nature of this area of research.

Corporate Governance, the Craft Brew Alliance, and A-B

The Craft Brew Alliance (CBA) resulted from the merger of two well-known craft brewers: Redhook Ale Brewery Inc and Widmer Brothers Brewing Co. The CBA was listed on the NASDAQ and the largest shareholder was Anheuser-Busch (A-B). This shareholder relationship violated the Brewers Association equity policy. At the heart of the dispute was the vision of the craft beer movement and disagreement about how brewers should be owned and governed. This chapter examines the corporate governance of one “craft” beer company and analyzes how, over time, this firm’s governance put it at odds with the culture of the industry in which it operated. The ultimate goal of this chapter is to understand the corporate governance challenges of publicly traded firms operating in craft culture, as such firms operate at a crossroads of artisanal tradition and public market expectations.

DOES MEDIA ATTENTION AFFECT FIRMS’ ENVIRONMENTAL PROTECTION EFFORTS? EVIDENCE FROM CHINA

Using data from publicly traded firms in China, we examine the relationship between media attention and firms’ environmental protection efforts. We show that: (1) media attention induces firms to exert more effort in environmental protection, (2) state-owned firms are more responsive to media attention than non-state-owned firms regarding environmental protection and (3) firms are more responsive when faced with local media attention and negative media reports. The results are robust to the subsample of heavily polluting industries. Overall, this study illustrates the use of media attention to regulate corporate behavior.