ESG, Corporate Governance & Future of the Firm

In new research, Pranjal Drall and Andrew Granato argue that the move of private equity firms into life insurance has increased the probability that insurers will go insolvent. If they do, under an obscure system of insurance guaranty funds, the losses will spread out beyond the insolvent insurer’s creditors to other insurers and, ultimately, taxpayers. 

The current law and economics framework of corporate law rests on four theoretical underpinnings that restrict students’ and regulators’ understanding of the stakes of corporate law. In new research, Mariana Pargendler argues that creating corporate laws that are more attuned to social welfare will require deprogramming its dominant framework.

In new research, Reilly S. Steel finds that corporate leaders’ individual political preferences are shifting left, but their aggregate spending remains skewed to the right. 

Public investors poured funds into buying SpaceX shares upon its mid-June IPO, and they can be expected to continue to do so heavily over...

In new research, Alejandro Herrera-Caicedo, Jessica Jeffers, and Elena Prager find that firms that share a C-suite executive or board director are much more...

In new research, Michele Fioretti, Victor Saint-Jean, and Simon Smith show that NGO activism follows a clear economic logic: when NGOs lack visibility, stakeholders do not view them as credible, forcing them to rely on high-profile campaigns during annual shareholder meetings. However, these actions generate attention but rarely influence decisions. As NGOs gain recognition, they can campaign earlier, when votes are still open, and meaningfully sway shareholders and change corporate behavior.

In new research, Anat R. Admati, Nate Atkinson, and Paul Pfleiderer argue that when misconduct is profitable, enforcement mechanisms aimed at deterring corporate misconduct often fail to achieve their goals and they may even backfire. The reason is that corporations can adjust internal governance mechanisms, particularly managerial compensation, to reduce or nullify the deterrent effects of corporate or managerial sanctions. These responses may lead to more misconduct and exacerbate social harm.

The following is an adapted excerpt from “To Protect Their Interests: The Invention and Exploitation of Corporate Bankruptcy" by Stephen J. Lubben, now out at Columbia University Press. 

In new research, Vikas Agarwal, Juan-Pedro Gómez, Kasra Hosseini, and Manish Jha explore how companies reward executives for meeting sustainability targets. They evaluate how ESG metrics to determine executive pay create tradeoffs with traditional financial incentives, and what that means for the future of ESG goals.

ProMarket Managing Editor Andy Shi reviews the controversy behind ExxonMobil’s new voting program and how it falls into the broader debates over recent developments to shareholder democracy and corporate governance.