Publications

October 2021
Article

Board Design and Governance Failures at Peer Firms

By: Shelby Gai, J. Yo-Jud Cheng and Andy Wu

Our study introduces board committees as a crucial determinant of board actions. We examine how directors who structurally link different board committees—referred to as multi-committee directors (MCDs)—explain why some board actions are merely symbolic while others... View Details

Keywords: Board Committees; Board Monitoring; New Director Nomination; Peer Financial Restatements; Governing and Advisory Boards; Corporate Governance; Performance Effectiveness

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2017
Working Paper

Does Financial Misconduct Affect the Future Compensation of Alumni Managers?

By: Boris Groysberg, Eric Lin and Georgios Serafeim

We explore how an organization’s financial misconduct may affect pay for former employees not implicated in wrongdoing. Drawing on stigma theory we hypothesize that although such alumni did not participate in the financial misconduct and they had left the organization... View Details

Keywords: Corporate Misconduct; Restatements; Stigma; Financial Misconduct; Compensation and Benefits; Crime and Corruption; Employees

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August 2021
Article

Don't Take Their Word for It: The Misclassification of Bond Mutual Funds

By: Huaizhi Chen, Lauren Cohen and Umit Gurun

We provide evidence that bond fund managers misclassify their holdings, and that these misclassifications have a real and significant impact on investor capital flows. In particular, many funds report more investment grade assets than are actually held in their... View Details

Keywords: Mutual Funds; Economics; Finance; Measurement and Metrics; Risk and Uncertainty; Financial Services Industry

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2021
Working Paper

Public Disclosure of Private Meetings: Does Observing Peers' Information Acquisition Affect Analysts' Attention Allocation?

By: Yi Ru, Ronghuo Zheng and Yuan Zou

We investigate the impact of observing peers’ information acquisition on financial analysts’ attention allocation. Using the timely disclosure mandate by the Shenzhen Stock Exchange as a setting, we find that, when analysts can observe that a firm is visited by other... View Details

Keywords: Attention Allocation; Informational Efficiency; Corporate Site Visits; Externalities; Information; Acquisition; Corporate Disclosure; Outcome or Result

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February 2021
Case

Enterprise Agility at Komerční Banka

By: Euvin Naidoo, Suraj Srinivasan and Sarah Gulick

In 2017, Jan Juchelka, the new CEO of Komerční Banka, identified the need for the bank to start an enterprise wide agile transformation. He started by working to create a sense of urgency to kick-start a process to enable the level of service delivery to customers he... View Details

Keywords: Agile; Agility; Transformation; Organizational Structure; Business Headquarters; Management Analysis, Tools, and Techniques; Management Systems; Banking Industry; Czech Republic

January 2021 (Revised May 2021)
Case

'GEnron'? Markopolos versus General Electric (A)

By: Jonas Heese and David Lane

In August 2019, Harry Markopolos—the forensic accountant known for uncovering Bernie Madoff’s Ponzi scheme—alleged that General Electric had committed accounting fraud totaling $38 billion, coining the term “GEnron” for perceived similarities with the 2001 accounting... View Details

Keywords: Financial Statements; Communication; Energy; Financial Condition; Insurance; Performance; Planning; Business and Shareholder Relations; Risk and Uncertainty; Value; Financial Services Industry; Financial Services Industry; Financial Services Industry

2018
Chapter

Behavioral Household Finance

By: John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian

This chapter provides an overview of household finance. The first part summarizes key facts regarding household financial behavior, emphasizing empirical regularities that are inconsistent with the standard classical economic model and discussing extensions of the... View Details

Keywords: Personal Finance; Global Range; Household; Behavior; Strategy; Governing Rules, Regulations, and Reforms; Product Design; Welfare

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November 2017
Editorial

Facebook, BlackRock, and the Case for Purpose-Driven Companies

By: George Serafeim

Purpose-driven companies have been shown to outperform their peers over the long term. But purpose-driven companies are also hard to come by. Why is that? Because purpose is costly. At the very least, it requires a credible commitment to that purpose. And credible... View Details

Keywords: Facebook; BlackRock; Purpose; Corporate Purpose; ESG; Short-termism; Mission and Purpose; Corporate Governance; Leadership

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March 2016 (Revised October 2023)
Case

Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover

By: Stuart C. Gilson and Sarah L. Abbott

In early 2013, Central European Distribution Corporation (CEDC), a large publicly traded producer and distributer of vodka and spirits in Eastern and Central Europe, has suffered significant declines in its financial performance, is at risk of defaulting on its debt,... View Details

Keywords: Hostile Takeover; Accounting Restatement; Activist Shareholder; Restructuring; Mergers and Acquisitions; Financial Statements; Corporate Governance; Investment Activism; Distribution Industry; Food and Beverage Industry; United States; Russia; Europe

January 2016 (Revised November 2019)
Case

Blackstone at Age 30

By: Josh Lerner, John D. Dionne and Amram Migdal

Since its IPO in 2007 and following the global financial crisis, Blackstone largely outpaced its alternative investment firm peers in assets under management, new business launches, profitability, and market capitalization. Under the leadership of Stephen A.... View Details

Keywords: Business Growth and Maturation; Asset Management; Private Equity; Financial Services Industry; New York (city, NY)

May 2015
Article

Admitting Mistakes: Home Country Effect on the Reliability of Restatement Reporting

By: Suraj Srinivasan, Aida Sijamic Wahid and Gwen Yu

We study the frequency of restatements by foreign firms listed on U.S. exchanges. We find that the restatement rate of U.S. listed foreign firms is significantly lower than that of comparable U.S. firms and that the difference depends on the firm's home country... View Details

Keywords: Accounting Restatements; Home Country Enforcement; Earnings Management; Globalized Firms and Management; Law; Financial Reporting; Financial Markets; Cross-Cultural and Cross-Border Issues

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May 2014
Case

Groupon, Inc.

By: Krishna G. Palepu, Blythe J. McGarvie and James Weber

Internet coupon site "Groupon" grew revenues rapidly and went public, but struggled to impress investors or operate profitably. Did it have a sustainable business model? Groupon sold coupons called Groupons which purchasers used to acquire goods or services at... View Details

Keywords: Accounting; Corporate Governance; Entrepreneurship; Financial Management; Financial Reporting; Financial Statements; Organizational Culture; Strategy; Web Services Industry; United States

January 2014 (Revised January 2014)
Case

Showdown at Cracker Barrel

By: Suraj Srinivasan and Tim Gray

In the fall of 2011, activist investor, Sardar Biglari, has acquired nearly 10% ownership in the Cracker Barrel restaurant chain. He believes that the board and senior management have failed and the company has underperformed relative to its peers. When he is denied a... View Details

July 2013 (Revised October 2013)
Supplement

United Rentals (B)

By: Jay W. Lorsch and Kathleen Durante

In April 2012, Jenne Britell, the Chairman of the board of directors of United Rentals, Inc. (NYSE: URI) was preparing her notes for an upcoming stockholders' meeting. It was a meeting unlike most other meetings she had chaired. Stockholders were about to vote on a... View Details

Keywords: Boards Of Directors; Board Committees; Chairman; Governing and Advisory Boards; Corporate Governance; Construction Industry; North America

June 2013 (Revised September 2015)
Case

Procter & Gamble

By: Jay W. Lorsch and Kathleen Durante

On July 12, 2012, Bill Ackman's Pershing Square Capital Management announced publicly that it had purchased about $2 billion of Procter and Gamble (P&G) stock. Shares in the company closed up 3.75% the day the disclosure was made public. Ackman told the New York... View Details

Keywords: Ackman; P＆G; Pershing Square Capital Managment; Disruption; Management Succession; Crisis Management; Acquisition; Financial Services Industry; Financial Services Industry

May 2013
Article

The Stock Selection and Performance of Buy-Side Analysts

By: Boris Groysberg, Paul Healy, George Serafeim and Devin Shanthikumar

Prior research on equity analysts focuses almost exclusively on those employed by sell-side investment banks and brokerage houses. Yet investment firms undertake their own buy-side research and their analysts face different stock selection and recommendation incentives... View Details

Keywords: Buy-side Analysts; Sell-side Analysts; Stock Recommendations; Recommendation Optimism; Recommendation Performance; Investment Recommendations; Conflicts Of Interest; Financial Markets; Financial Institutions; Financial Services Industry; United States

March 2013
Case

NovaStar Financial: A Short Seller's Battle

By: Suraj Srinivasan and Amy Kaser

The NovaStar case describes the challenges faced by short seller Marc Cohodes of hedge fund Rocker Partners as he tried to expose what he thought was widespread fraud in mortgage lender NovaStar Financial. The case is set in the time period from 2001 to 2007 and tracks... View Details

February 2013
Case

Diamond Foods, Inc.

By: Suraj Srinivasan and Tim Gray

The Diamonds Foods, Inc. case describes the major accounting blow up at the company in late 2011 that was triggered by a report by Off Wall Street, a prominent short selling research firm. Diamond Foods, a high flying growth company in 2011, grew from a walnut farmers'... View Details

December 2012
Case

Trouble Brewing for Green Mountain Coffee Roasters

By: Suraj Srinivasan and Michael Norris

In October 2011, noted hedge fund manager David Einhorn of Greenlight Capital delivered a presentation at an investors' conference analyzing the business and accounting quality weaknesses of Green Mountain Coffee Roasters. Until then Green Mountain had exhibited rapid... View Details