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  • February 2010
  • Other Article

The Chilling Effect of Sarbanes Oxley: A Discussion of Sarbanes-Oxley and Corporate Risk-Taking

By: Aiyesha Dey
Bargeron, Lehn, and Zutter [2009. Sarbanes–Oxley and corporate risk-taking. Journal of Accounting and Economics, forthcoming] document that as compared with non-US firms, risk-taking by publicly traded companies in the US declined after the passage of the... View Details
Keywords: Risk; Corporate Risk-taking; Risky Investments; Risk and Uncertainty
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  • 30 Nov 2016
  • Working Paper Summaries

The Stock Market and Bank Risk-Taking

Keywords: by Antonio Falato and David Scharfstein; Financial Services; Banking
  • Winter 2013
  • Article

Corporate Governance Reform and Executive Incentives: Implications for Investments and Risk-Taking

By: Daniel Cohen, Aiyesha Dey and Thomas Lys
We investigate the mechanism through which the Sarbanes Oxley Act (SOX) was associated with changes in corporate investment strategies. We document that the passage of the governance regulations in SOX was followed by a significant decline in pay‐performance... View Details
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  • 2014
  • Working Paper

Putting Skin in the Game: Managerial Ownership and Bank Risk-Taking

By: Jan Bouwens and Arnt Verriest
This paper examines the relation between managerial ownership and bank risk exposure for a large sample of international financial institutions. We seek empirical evidence suggested by theories concerning conflicts between managers and owners over risk-taking. We argue... View Details
Keywords: Managerial Equity Ownership; Financial Risk; Banks; Motivation and Incentives; Risk Management; Employee Ownership; Corporate Governance; Banks and Banking; Banking Industry
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  • 2018
  • Working Paper

Bank Risk-Taking and the Real Economy: Evidence from the Housing Boom and Its Aftermath

By: Antonio Falato, Giovanni Favara and David Scharfstein
The short-termism of lenders amplifies boom-bust credit cycles, leading in turn to real costs for the aggregate economy. During the U.S. housing credit boom, publicly-traded banks increased mortgage lending activity and relaxed standards much more than privately-held... View Details
Keywords: Risk and Uncertainty; Financial Markets; Investment; Corporate Finance; Banks and Banking
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  • Article

MIT Roundtable on Corporate Risk Management

By: Robert C. Merton

Against the backdrop of financial crisis, a distinguished group of academics and practitioners discusses the contribution of financial management and innovation to corporate growth and value, along with the pitfalls and unintended consequences of such innovation.... View Details

Keywords: Financial Crisis; Market Participation; Finance; Innovation and Invention; Growth and Development Strategy; Value; Distribution; Capital Structure; Risk Management; Business Ventures; Business Model; Strategy
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  • 14 Oct 2002
  • Research & Ideas

The Widening Rift Between Corporations and Society

Society is evolving and it is leaving business behind, say HBS professor Shoshana Zuboff and James Maxmin. In their new book, The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism, they address... View Details
Keywords: by Martha Lagace
  • 19 Sep 2011
  • Research & Ideas

Doomsday Coming for Catastrophic Risk Insurers?

reinsurers may one day cease to exist in their current form, reinsurance will go on.) They should also act more like risk-taking investors and less like risk-averse corporations, their capital fluctuating "with people's decisions... View Details
Keywords: by Maggie Starvish; Financial Services
  • 19 Jan 2016
  • First Look

January 19, 2016

reasons—and revisits the associated implications for investing and corporate finance, examining asset allocation, high leverage in financial firms, low leverage in industrial firms, private equity, venture capital, and bank capital... View Details
Keywords: Sean Silverthorne
  • 21 Jul 2010
  • Research & Ideas

HBS Faculty Debate Financial Reform Legislation

stubbornly high. To fight these forces, we need appropriate risk-taking and credit extension to fuel economic growth. This regulation creates safeguards, but it may in fact discourage and impede these activities. Regulators need to think... View Details
Keywords: by Staff
  • 21 Sep 2009
  • Research & Ideas

Excessive Executive Pay: What’s the Solution?

that led to the financial crisis. And while the intricate details of pay plans don't evoke the outrage of multimillion-dollar paydays, curbing the risk-taking incentives embedded in those plans is key to resolving the current crisis and... View Details
Keywords: by Roger Thompson
  • 17 Jan 2023
  • In Practice

8 Trends to Watch in 2023

As 2023 begins, businesses and employees face an uncertain economy and labor market, as the twin dilemmas of inflation and interest rates weigh on forecasts. Harvard Business School faculty share the top trends that they believe will shape the workplace and markets... View Details
Keywords: by Avery Forman
  • 11 Sep 2007
  • First Look

First Look: September 11, 2007

developing proven molecules from strategic partners to leapfrog competition and create large molecule biologics in India. The company understood that its transition from an API to an innovation-led company focused on new biologics would require patience and a View Details
Keywords: Martha Lagace
  • 21 Jan 2009
  • First Look

First Look: January 21, 2009

Online Video Harvard Business School Case 709-447 In late March 2007, CBS faces an important decision about its online video strategy. A just-announced joint online distribution venture between NBC Universal and News Corporation (Fox) is... View Details
Keywords: Martha Lagace
  • 04 Feb 2013
  • Research & Ideas

Are the Big Four Audit Firms Too Big to Fail?

rules and thus on capital markets, observes Karthik Ramanna, an associate professor and Henry B. Arthur Fellow in the Accounting and Management unit at Harvard Business School, where he studies the political economy of corporate... View Details
Keywords: by Martha Lagace; Accounting
  • 02 Apr 2007
  • Lessons from the Classroom

Making the Move to General Manager

think and improving their business judgment is what GMP is really all about, says Esty. For faculty it's exciting, he said, because the teaching imperative mirrors the participants' experiences because faculty teach outside their own area of expertise. Esty, for... View Details
Keywords: by Martha Lagace
  • 01 Sep 2009
  • News

Over the Top

Illustration by Ken Orvidas/theispot.com In the search for culprits in the global financial meltdown, bloated executive pay and the excessive risk-taking behavior it fueled stand out as prime suspects. Of the two, pay dominates the... View Details
Keywords: Roger Thompson; Colleges, Universities, and Professional Schools; Educational Services; Finance; Government
  • 10 Mar 2014
  • Research & Ideas

Counting Up the Effects of Sarbanes-Oxley

was to improve corporate governance and restore the faith of investors, but many in the business world spoke out against SOX, viewing it as a politically motivated overcorrection that would lead to a loss of View Details
Keywords: by Julia Hanna; Accounting; Banking
  • 10 May 2004
  • Research & Ideas

Rethink the Value of Joint Ventures

appear to be both more fragile and less rewarding. Q: What did you observe on the evolution of financial and ownership arrangements of transnational corporations in recent years? A: The quest for control of their subsidiaries reflects the... View Details
Keywords: by Cynthia Churchwell
  • 26 Aug 2014
  • First Look

First Look: August 26

influences risk-taking by enhancing one's sense of control. Across multiple inductions of guilt, we demonstrate that experimentally induced guilt enhances optimism about risks for the self (Study 1), preferences for gambles versus... View Details
Keywords: Sean Silverthorne