Corporate Governance in the News

Corporate Governance in the News

The Rise of Private Equity

via Private Company Director

Former Chairman and CEO of Rohm and Haas Raj Gupta and TD Bank Endowed Professor of Finance Michelle Lowry discuss three key factors underlying the growth in private equity.

Aramark tweaks top bosses’ pay structure to please shareholders, but that may not be enough

via The Philadelphia Inquirer

Raj & Kamla Gupta Governance Institute Executive Director Patricia Connolly discusses Aramark’s recent changes in pay structure.

Musk’s Tweet Fallout & the Board: Is there unrest in Tesla’s boardroom?

via Directors & Boards

Professor of Finance and Academic Director of the Institute for Corporate Governance Michelle Lowry shares her views on what Elon Musk’s recent tweets could mean for Tesla.

21st Century Fox Anticipates Settlements in Roger Ailes Harassment Probe

via The Wall Street Journal

Founder of LeBow’s Center for Corporate Governance Ralph Walkling is quoted in a story about the continued fallout at Fox News following Roger Ailes’ ouster on charges of sexual misconduct.

Donald Trump made $39 million running failed casino company

via CNN

David Becher, associate professor of finance, and Ralph Walkling, professor of finance and founder of the Center for Corporate Governance, are quoted in a CNN Money article about dealings between Donald Trump and the public casino company he founded.

On the Boards

via philly.com

Four accomplished business people have been named to the advisory board of Drexel LeBow’s Center for Corporate Governance.

Danger! American Apparel, Lululemon impale

via CNN

As stock prices tumble at two apparel brands with controversial founders, CNN Money looks to research by LeBow professor Ralph Walkling, PhD to examine what the costs of the two men’s indiscretions truly are.

Symantec’s CEO-Shuffling Board

via The Wall Street Journal

LeBow’s Eli Fich, PhD, associate professor of finance, spoke to the Wall Street Journal about Symantec’s board amid the criticism surrounding its firing of its CEO last week. Fich says the average age of its members is “substantially higher” than other tech companies.

The WSJ reports: “Symantec last week fired Chief Executive Steve Bennett, less than two years after ousting his predecessor, who had himself spent only about three years on the job. The stock fell about 12 percent, suggesting the market thinks shuffling CEOs again may not solve Symantec’s problems.”

Corporate CSR: What It Means to Go ‘All In’

via Knowledge@Wharton Today

Daniel Korschun, Ph.D., assistant professor of marketing, is quoted in a Knowledge@Wharton Today article on corporate social responsibility. Korschun says: “We’re seeing the third wave of CSR, and companies are trying to incorporate CSR into the business model. That’s putting the onus on companies and management to find ways to innovate. It’s no longer enough to be somewhat engaged.”

Despite Resistance, Boards Shift Toward Breaking Up CEO, Chair Roles

via Fox Business

A Fox Business article on the shift toward separating the roles of CEO and chairman quotes Ralph Walkling, PhD, executive director of the Center for Corporate Governance.“It’s sound governance to split the roles,” says Walkling. “I’ve known some CEOs who I thought were pretty darn effective at being chairman of the board. But I still worried about not having the independence and a separate pair of eyes.”

Philadelphia City Council Told Women Getting Short Shrift in Business

via KYW Newsradio

Patricia Connolly, director of LeBow’s Center for Corporate Governance and a member of the Forum of Executive Women, told Philadelphia City Council that the nominating process of many corporate boards becomes a “self-fulfilling exercise” in which a lack of diversity on the board is perpetuated by those who sit on it, as reported by KYW Newsradio.

Chesapeake Cuts Pay, Jet Travel For Board

via The Wall Street Journal

Ralph Walkling, Ph.D., executive director for the Center for Corporate Governance, is quoted in a Wall Street Journal article about Chesapeake Energy cutting its board members’ pay.”The question is, will the market think that the board is being responsive, or will they think that the board should have been proactive before these issues were raised,” Walkling says. “It could be a case of too little, too late.”

Big Board Dealt Big Rebuke

via Wall Street Journal

Ralph Walkling, Ph.D., executive director of the Center for Corporate Governance, is quoted in a Wall Street Journal article on NYSE Euronext, which suffered an embarrassing defeat last week when shareholders voted against the re-election of director Ricardo Salgado. Walkling says “low votes for directors are rare.”

In Facebook Deal, Board Was All But Out of Picture

via Wall Street Journal

Ralph Walkling, Ph.D., executive director of LeBow College’s Center for Corporate Governance, is quoted in today’s Wall Street Journal in an article about Facebook Inc.’s purchase of Instagram. Walkling says the board should provide caution to the CEO in such deals, as “they are the last line of defense for minority shareholders.”

When Professional and Personal Lives Collide

via Fox Business

Ralph Walkling, PhD, executive director of LeBow College’s Center for Corporate Governance, is quoted in the Fox Business article about the blurred lines between personal and professional lives in business and the potential for scandal when they meet. Says Walkling: “Certainly shareholders lose when this bad news come out, but there’s also evidence that accounting performance suffers a bit during the time when these alleged indiscretions were going on.”

The Disclosure Debate: When Should Companies Reveal Cyber Attacks

via Fox Business

Ralph Walkling, Ph.D., executive director of LeBow College’s Center for Corporate Governance, was quoted in the Fox Business article “The Disclosure Debate: When Should Companies Reveal Cyber Attacks?”

Walkling says, “You’re not going to want to sacrifice anything like reputation to meet short-term results.”  

IAC Recruits Chelsea Clinton to its Board

via Fox Business

Ralph Walkling, PhD, executive director of LeBow’s Center for Corporate Governance, was quoted in a Fox Business story about Chelsea Clinton’s appointment to the board of directors at IAC.“It is not clear to me that the advising role here is best filled by someone with Chelsea’s talents, nor is it clear that such talents are best placed on the board level,” says Walkling.

A New Target at Yahoo

via The Wall Street Journal

Ralph Walkling, Ph.D., executive director of the Center for Corporate Governance, was quoted in a Wall Street Journal article about the shifting blame for Yahoo’s lack of revenue from Chief Executive Carol Bartzto Chairman Roy Bostock.The Yahoo chairman’s actions, including firing Ms. Bartz, “appear to be too little too late,” Walkling says.

U.S. Chiefs Set for Big Payoffs Sell More Cheaply, Study Says

via Bloomberg

Research conducted by Drexel LeBow’s Ralph Walkling, executive director of the Center for Corporate Governance; Eliezer Fich, associate professor of finance and a Center fellow; and Anh Tran, who recently earned his Ph.D. at LeBow and is now a professor at the Cass Business School at City University London, has recently been covered by Bloomberg and the New York Times Blog, as well as a number of French publications including ZoneBourse, Le Monde, and NewsBanque.

The researchers found that chief executives with over-generous severance pay arrangements sell out significantly more cheaply when weighing up a takeover bid. Company bosses with so-called golden parachutes that are 10 percent more generous than the average agreed to sell their companies for a 5 percent smaller takeover premium.

A Chance to Veto a CEO's Bonus

via The Wall Street Journal

Research by Ralph Walkling, Ph.D., director of the Center for Corporate Governance at Drexel LeBow, is referenced in the Wall Street Journal article “A Chance to Veto a CEO’s Bonus.” Walkling has found that voting against directors may discourage them from acting like rubber stamps. Each 1 percent increase in “no” votes knocks up to $222,000 off the excess compensation of the chief executive officer the next year—and even raises the odds that the CEO will be replaced, his research suggests.

Given Say on Pay, Shareholders Say No

via SmartMoney.com

Research conducted by Ralph Walkling, executive director of LeBow College’s Center for Corporate Governance, and Jie Cai, assistant professor of finance, was referenced in a SmartMoney.com article titled “Given Say on Pay, Shareholders Say No.”

Companies that overcompensate their executives relative to peers can see a stock-price boost when say on pay proposals are announced, according to research by Cai. Yet, in the past, activist shareholders’ say on pay demands haven’t targeted firms that truly overpay their top brass, Cai says.

Improving Corporate Governance: A Memo to the Board

via The Wall Street Journal

John J. Brennan, chairman emeritus of Vanguard, had an op-ed published in the Wall Street Journal that was based on a speech he gave at LeBow College’s Center for Corporate Governance. 

It is corporate proxy season, and one can expect the usual spate of stories about excessive executive compensation, lax directors and the failure of institutional investors to exert their influence over boards and management,” Brennan writes. “As a participant in the corporate governance process for a large investment manager for more than 25 years, I will take a contrary view. Over the past quarter-century, the performance of corporate boards has improved markedly. Yet there’s room to go.”

CEOs Still Have A Credibility Gap

via Business Week

Elliot Schreiber Ph.D., executive director of LeBow College’s Center for Corporate Reputation Management, was quoted in an article in BusinessWeek titled “CEOs Still Have a Credibility Gap”.

Commenting on global trust in banks and the plunge U.S. banks have taken in  the last few years, Schreiber said “I think Wall Street is behind the times. On Wall Street they really do operate in an insulated world. The important stakeholders to them are one another.”  

The Forever War

via The New York Times

A New York Times Dealbook article references a research paper co-authored by associate professor of finance and Center for Corporate Governance Fellow David Becher, Ph.D.

Harleysville deal unlikely to be the last

via Philadelphia Business Journal

David Becher, a fellow at Drexel University’s LeBow College of Business Center for Corporate Governance and associate professor of finance, commented on an article about the sale of Harleysville National Corp. to Buffalo’s First Niagara Financial Corp. Becher said that depending on the issues involved and how a bank responds, a regulatory action could spell certain death.“If a bank is ordered to raise cash, that could be impossible for some,” Becher said. “But they can change board members or executives and improve the lending portfolio.”

On the Lookout for inflation

via Philadelphia Business Journal

Edward Nelling, Ph.D., a fellow at LeBow College’s Center for Corporate Governance, commented in a recent article on inflation. “The probability of facing inflation is higher than it has been in the recent past, so it is something that investors should perhaps consider,” said Nelling.

Armstrong, ‘Celebrity’ Directors Targeted in SEC Rule (Update1)

via Bloomberg News

Companies recruiting celebrities to their board often are seeking to burnish their image, said David Becher, associate finance professor at Drexel University in Philadelphia. “If I’m a firm that needs to raise money, a star may help you because of their public profile,” he said. “If a defense company is trying to get an Army or Navy contract, what better person is there than a retired general who has government contacts?”

Smart bankers tell pay story first

via Pittsburgh Post Gazette

Banks, regardless of whether or not they’ve gotten federal bailout money, have to recognize that the rules of engagement with the public have changed,” said Drexel University marketing professor Elliot Schreiber, who specializes in corporate reputation management.