Publications

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09 May 2017
What Do You Think?

Should Management Be Primarily Responsible to Shareholders?

align managers’ interests with those of shareholders), a reduction in the defenses against hostile takeovers (that typically increase short-term value for owners of the acquired company), increased merger and acquisition activity,... View Details

Keywords: by James Heskett

June 1993 (Revised November 2007)
Case

Duckworth Industries, Inc.--Incentive Compensation Programs

By: William E. Fruhan Jr.

A private company is considering an introduction of a long-run incentive compensation system in which payoffs to managers are determined by the economic value added for shareholders by their individual business units. The proposed new system is compared to a number of... View Details

Keywords: Executive Compensation; Management Teams; Business and Shareholder Relations; Motivation and Incentives; Value Creation

November 29, 2011
Article

The Role of The Board in Creating a Sustainable Strategy

By: Robert G. Eccles, Ioannis Ioannou and George Serafeim

While conceptually elegant, the belief that a corporation's role is to maximize value for shareholders is under increasing challenge as society's expectations for companies change. An equally elegant new concept that takes account of these dual pressures has yet to... View Details

Keywords: Value Creation; Business and Stakeholder Relations; Corporate Strategy; Business and Shareholder Relations; Corporate Social Responsibility and Impact; Performance Expectations; Governing and Advisory Boards; Management Practices and Processes; Decisions; Risk and Uncertainty; Cost vs Benefits; Information

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November 2004
Case

Deere & Company

By: Ray A. Goldberg and Hal Hogan

John Deere & Co. wants to improve shareholder value and provide incentives to do so. The task is difficult in a volatile agriculture and construction industry. It also wants to be more global and provide machinery that traces commodities from the field to the consumer. View Details

Keywords: Factories, Labs, and Plants; Volatility; Machinery and Machining; Multinational Firms and Management; Goods and Commodities; Goals and Objectives; Strategic Planning; Agriculture and Agribusiness Industry; Construction Industry

Research Summary

Trust

By: Sandra J. Sucher

In this research, I aim to provide a practical orientation to trust—how to build it, how it can be damaged, how it might be repaired—grounded in my experience as an executive and in the research on organizational trust and moral philosophy. As a case researcher, I... View Details

24 Mar 2015
Working Paper Summaries

Corporate Sustainability: First Evidence on Materiality

Keywords: by Mozaffar Khan, George Serafeim & Aaron Yoon; Financial Services

October 2011
Article

Concentrating on Governance

By: Dalida Kadyrzhanova and Matthew Rhodes-Kropf

This paper develops a novel trade-off view of corporate governance. Using a simple model that integrates agency costs and bargaining benefits of management friendly provisions, we identify the economic determinants of the resulting trade-offs for shareholder value.... View Details

Keywords: Market Participation; Corporate Governance; Business and Shareholder Relations

May 2013
Article

The Performance Frontier: Innovating for a Sustainable Strategy

By: Robert G. Eccles and George Serafeim

By now most companies have sustainability programs. They're cutting carbon emissions, reducing waste, and otherwise enhancing operational efficiency. But a mishmash of sustainability tactics does not add up to a sustainable strategy. To endure, a strategy must address... View Details

Keywords: Sustainability; Innovation; Environment; Corporate Reporting; Corporate Social Responsibility; Governance; Strategy; Value; Corporate Social Responsibility and Impact; Performance; Environmental Sustainability; Innovation and Invention

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05 Oct 2009
Research & Ideas

The Vanguard Corporation

communities like leeches. The time is ripe for a new corporate model, driven by a new type of business leader, where creating business value also means creating value for society. Surprisingly, Kanter finds... View Details

Keywords: by Sean Silverthorne

22 Aug 2007
Research & Ideas

The Hedge Fund as Activist

counterintuitive to us that a portfolio manager with a short investment horizon would be willing to devote time and energy to a task delivering long-term value. After all, there are no guarantees that the effort will pay off, or that other View Details

Keywords: by Robin Greenwood; Financial Services

16 Feb 2023
HBS Case

ESG Activists Met the Moment at ExxonMobil, But Did They Succeed?

The impact-investment hedge fund Engine No. 1 made a big splash in May 2021 when it managed to get three nominees elected to the ExxonMobil board of directors. It was an open effort to prod the oil giant toward renewable energy and test whether activist investing could... View Details

Keywords: by Lane Lambert; Financial Services

April 2006 (Revised April 2012)
Background Note

The Role of Private Equity Firms in Merger and Acquisition Transactions

By: William E. Fruhan Jr.

Explores the importance of private equity firms in merger and acquisitions activity around the globe. In many countries, these firms now account for one quarter of the total merger and acquisition activity of all firms. The larger private equity firms generate fees for... View Details

Keywords: Leveraged Buyouts; Mergers and Acquisitions; Private Equity; Investment Funds; Value Creation

March 2009
Background Note

Evaluating M&A Deals: Floors, Caps, and Collars

By: Carliss Y. Baldwin

As equity consideration has become more popular in acquisitions, so has the use of the "pricing-protection" mechanisms, such as floors, caps, and collars. These contractual devices provide insurance to the shareholders of the target and may protect the buyer as well.... View Details

Keywords: Mergers and Acquisitions; Equity; Price; Contracts; Business and Shareholder Relations

February 2014
Article

Governance and CEO Turnover: Do Something or Do the Right Thing?

By: Ray Fisman, Rakesh Khurana, Matthew Rhodes-Kropf and Soojin Yim

We study how corporate governance affects firm value through the decision of whether to fire or retain the CEO. We present a model in which weak governance—which prevents shareholders from controlling the board—protects inferior CEOs from dismissal, while at the same... View Details

Keywords: Governing and Advisory Boards; Value; Retention; Resignation and Termination; Corporate Governance; Management Teams; Business and Shareholder Relations

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24 Jan 2017
First Look

First Look at New Research: January 24, 2017

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=52122 January 2017 Strategic Finance Managing Healthcare Costs and Value By: Kaplan, Robert S., Michael E. Porter, and Mark L. Frigo Abstract—Rising health care costs are a... View Details

Keywords: Sean Silverthorne

May 2017
Supplement

Battle for the Soul of Capitalism: Unilever and the Kraft Heinz Takeover Bid (B)

By: William W. George and Amram Migdal

This (B) case describes the aftermath of Unilever’s February 2017 rejection of Kraft Heinz Company’s (KHC)/3G Capital’s (3G) unsolicited $143 billion takeover offer. In an effort to defend itself against future attempts by KHC/3G or other suitors, Unilever announced on... View Details

Keywords: Value Creation; Restructuring; Performance Improvement

September 2011 (Revised May 2013)
Case

New Resource Bank: In Pursuit of Green

By: Christopher Marquis and Juan Almandoz

New Resource Bank was founded in San Francisco in 2006 with a mission focused on environmental sustainability. The case illustrates the opportunities and challenges of banking on values and the challenges of organizations defining a social and environmental commitment.... View Details

Keywords: Motivation and Incentives; Corporate Entrepreneurship; Business and Stakeholder Relations; Corporate Social Responsibility and Impact; Strategy; Business and Government Relations; Banking Industry; San Francisco

January 2025
Case

A Tiger in the Tank: Exxon Sues Investors

By: Clayton S. Rose, Sarah Sasso and James Weber

In June 2024, investors were trying to make sense of ExxonMobil’s (Exxon) lawsuit against two impact investors, Arjuna Capital (Arjuna) and Follow This, that had just been dismissed by the U.S. District Court of Northern Texas. Exxon’s suit challenged the rights of two... View Details