Journal of Applied Corporate Finance最新文献_第9页

Lessons for ESG activists: The case of Sainsbury's and the living wage ESG活动家的教训：塞恩斯伯里的案例和生活工资

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Journal of Applied Corporate Finance Pub Date : 2023-06-01 DOI: 10.1111/jacf.12550

Tom Gosling

{"title":"Lessons for ESG activists: The case of Sainsbury's and the living wage","authors":"Tom Gosling","doi":"10.1111/jacf.12550","DOIUrl":"10.1111/jacf.12550","url":null,"abstract":"Sainsbury's, one of the UK's large supermarket chains, found itself in the crosshairs of ESG activism in 2022. That was when ShareAction, a well-known responsible investment NGO, filed the first Living Wage resolution in the UK.1Among the 10 co-filers were blue-chip names in the UK investment world, including Legal and General, HSBC Asset Management, Fidelity International, Nest, and the Brunel Pension Partnership.This Living Wage resolution was rejected by roughly five out of every six of the Sainsbury's investors that voted on the resolution at the company's Annual General Meeting on July 7, 2022. To understand how and why this measure failed to gain acceptance, it's useful to start by noting the difference between The Living Wage and the National Living Wage, which is briefly described in the box below.ShareAction clearly saw its Living Wage resolution at Sainsbury's as the opening salvo in a battle it intended to conduct with the entire UK supermarket sector. It was also one of the NGO's first efforts to draw attention to the importance of the “S” in ESG. The proposal described the resolution as a “litmus test for investors’ social commitments amid the cost-of-living crisis.”In an unusual move, Schroders, the well-known UK asset manager with one of the five largest investment positions in Sainsbury's, published ahead of the vote its rationale for its decision not to support the resolution. Kimberley Lewis, Head of Schroders’ Active Ownership group, wrote an article titled, “Why Sainsbury's AGM is a Pivotal Moment for ESG.”4 After pointing out that Sainsbury's is widely recognized as a well-run company that considers all important stakeholders in key decisions and has invested heavily in its employees, the article then expressed the concern that imposing this further restriction on Sainsbury's at a time when no other UK supermarket was a Living Wage Employer could undermine the company's competitive position, which would end up doing economic harm to many of its employees and customers as well as its investors.Lewis closed her article with a warning against the unforeseen risks of applying ESG factors “in a blanket way and without due consideration,” describing it as “‘unthinking ESG’ … which harms the credibility of sustainable investing.” Along with this warning, she also expressed her view of the outcome of the impending resolution as “a test of whether important nuances in these debates can be heard”.There is much that could be said about this resolution. We might start by asking how ShareAction could claim that the resolution—which requires the company to adopt a floor on employee pay set by a third party—would leave board discretion wholly unaffected and intact, because the Living Wage Foundation “would merely set the minimum level”. But while we are raising such questions about the NGO, we could also ask why Schroders, itself a Living Wage Employer, thinks that what is sauce for","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"35 2","pages":"8-15"},"PeriodicalIF":0.9,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12550","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43294902","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

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Stakeholder capitalism: What it is, what it isn't, and a new model for measuring stakeholder trade-offs 利益相关者资本主义:它是什么，它不是什么，以及衡量利益相关者权衡的新模型

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Journal of Applied Corporate Finance Pub Date : 2023-06-01 DOI: 10.1111/jacf.12552

Gregory W. Brown, Gerald D. Cohen

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Overseeing the dynamic materiality of ESG risks: The board's role 监督ESG风险的动态重要性:董事会的角色

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Journal of Applied Corporate Finance Pub Date : 2023-05-26 DOI: 10.1111/jacf.12551

Norman T. Sheehan Pro., Han-Up Park Pro., Richard C. Powers Pro., Sarah Keyes CEO

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Executive Summaries 摘要报告

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Journal of Applied Corporate Finance Pub Date : 2023-05-25 DOI: 10.1111/jacf.12549

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Executive Summaries 执行概要

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Journal of Applied Corporate Finance Pub Date : 2023-05-02 DOI: 10.1111/jacf.12547

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Does board independence matter in companies with a controlling shareholder? 在有控股股东的公司中，董事会的独立性是否重要？

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Journal of Applied Corporate Finance Pub Date : 2023-04-30 DOI: 10.1111/jacf.12543

Jay Dahya, Orlin Dimitrov, John J. McConnell

{"title":"Does board independence matter in companies with a controlling shareholder?","authors":"Jay Dahya, Orlin Dimitrov, John J. McConnell","doi":"10.1111/jacf.12543","DOIUrl":"https://doi.org/10.1111/jacf.12543","url":null,"abstract":"Studies have reported valuation discounts for publicly traded companies based in countries that provide weak legal protection for minority shareholders.1 Such discounts are often attributed to the ability of controlling shareholders to extract “private benefits” that come at the expense of minority shareholders. Without sufficient legal deterrents, controlling shareholders have both the incentive and the ability to transfer corporate resources to themselves for personal consumption or gain. These transfers take a number of forms, including related-party “tunneling” transactions as well as corporate perks and, in some cases, outright theft.But under certain circumstances—notably, when their companies want to raise capital by selling shares—the controlling shareholders may face a stronger incentive to reduce this value discount by providing credible commitments to outside investors to forgo this diversion of corporate resources. Various commitment mechanisms have been proposed in the literature, including cross-listing on U.S. exchanges as well as general improvements in overall corporate governance systems.2 But another possible solution is more effective oversight of controlling shareholders by corporate boards.We recently published a study that investigated the effects of appointing more independent directors on the value discounts of companies controlled by a dominant shareholder.3 Using biographical data on nearly 8000 directors of 799 closely held companies in 22 countries, we found a significant positive correlation between corporate value and the fraction of the board made up of independent directors. Moreover, we found this relation to be especially pronounced in countries that afford investors weak legal protection—countries where controlling shareholders presumably have then greatest opportunity to increase corporate values by submitting to greater oversight.Thus, the findings of our study are consistent with the possibility that the appointment of directors with no ties to the controlling shareholder can be a powerful mechanism to reduce the threat of resource diversion and transfer of value from minority shareholders. But how reliable is this interpretation, given that the same controlling shareholders that have the power to appoint the board members also have the power—perhaps if they do too good a job—to dismiss them?To address this issue, we performed several additional tests designed to detect the ability of independent directors to monitor the actions of the controlling shareholder. One such test revealed that 71% of independent directors in our sample sat on multiple corporate boards. We reasoned that multiple appointments are more likely to be a proxy for “reputational capital,” and that directors with multiple appointments should be less willing to jeopardize those reputations by proving to be ineffective monitors. As a second check on whether independent directors help reduce the threat of transf","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"35 1","pages":"72-82"},"PeriodicalIF":0.9,"publicationDate":"2023-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12543","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50155665","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

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A survey of US corporate financing innovations: 1970–1997 美国企业融资创新调查：1970-1997

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Journal of Applied Corporate Finance Pub Date : 2023-04-28 DOI: 10.1111/jacf.12542

Kenneth A. Carow, Gayle R. Erwin, John J. McConnell

{"title":"A survey of US corporate financing innovations: 1970–1997","authors":"Kenneth A. Carow, Gayle R. Erwin, John J. McConnell","doi":"10.1111/jacf.12542","DOIUrl":"https://doi.org/10.1111/jacf.12542","url":null,"abstract":"An appropriate subtitle for this article might well be “The Evolution Lives! Long Live the Evolution!” Previous articles in this journal have described innovations in financial security design and the forces that give rise to such innovations.1 In this article, we expand upon and update those articles by documenting changes over the past 30 years in the way US public corporations finance themselves both in public and private security markets.2The past articles have focused mainly on innovations in the kinds of securities issued. But major changes have also occurred in the way securities are issued, and in the national markets where they are issued. Traditional registered offerings have been partly displaced by shelf registered offerings and Rule 144A private offerings. And once exclusively domestic US offerings are increasingly being supplemented by foreign market offerings by US companies, and by simultaneously domestic and foreign offerings. In the research summarized in this article, we tracked not only the kinds of securities (both by number and by dollar amount) issued each year by US public companies between 1970 and 1997, but also their method of issuance and the locale of the offerings.In a 1992 article in this journal entitled “An Overview of Corporate Securities Innovation,” John Finnerty traced innovations (through the first half of 1991) in the design of securities issued by US corporations by identifying the year in which the design first appeared.3 Our study extends that article's findings in two ways: (1) by updating developments in the design of corporate securities through the end of 1997 and (2) by presenting an annual time series of security issues classified according to the design of the security from 1970 through 1997.Our updating of new developments in security design provides clear evidence that the pace of innovation in securities design has not slackened. For example, whereas Finnerty identified 40 types of securities that were first issued by US companies in the 1980s,4 our study found 34 kinds that were first issued during the first eight years of the 1990s.5 Among these securities were equity indexed bonds, commodity indexed preferred stock, convertible exchangeable notes, and dividend enhanced convertible securities.Our study also attempted to identify which innovations have prospered over time and which have languished or even disappeared. For example, the first non-convertible floating rate note (FRN) was issued in 1974. The use of FRNs increased steadily throughout the next 24 years and, in 1997 alone, US public companies issued 1411 FRNs with an aggregate face value of $139.8 billion. By contrast, after the first convertible adjustable rate bond (CARB) came to market in 1981, 10 additional CARBs were issued during the remainder of the 1980s, and none have been issued since. Our findings suggest that financial innovation is a trial and error process in which “failure is","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"35 1","pages":"55-71"},"PeriodicalIF":0.9,"publicationDate":"2023-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12542","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50117740","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

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CEOs, abandoned acquisitions, and the media CEO、放弃收购和媒体

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Journal of Applied Corporate Finance Pub Date : 2023-04-28 DOI: 10.1111/jacf.12545

Baixiao Liu, John J. McConnell

{"title":"CEOs, abandoned acquisitions, and the media","authors":"Baixiao Liu, John J. McConnell","doi":"10.1111/jacf.12545","DOIUrl":"https://doi.org/10.1111/jacf.12545","url":null,"abstract":"Do the media play a role in corporate governance and, if so, how? Those questions are broad and their answers have broad implications. This is especially so in countries such as the U.S. that are characterized by a free and vigorous business press. By corporate governance, we mean the traditional role of corporate governance in monitoring corporate management to ensure that top managers act in shareholders’ interests. So the questions are whether this active media coverage plays a role in guiding corporate managers to act in shareholders’ interests and, if so, how do they do it.Academic studies have proposed that the media can play such a role by influencing the value of top managers’ reputational capital.1 In this framework, a manager's reputational capital is viewed as the present value of his future wages and employment opportunities.2 The media are said to affect such values by reporting on managers’ actions and by shaping perceptions of those actions. And to the extent that they influence managers’ reputational capital, the media can play a role in guiding managers’ actions. Whether they do so—and whether they do so in ways that are in shareholders’ interests—are open questions. We address those questions in one specific set of circumstances: namely, when would-be acquirers are considering whether to carry out or abandon acquisition attempts that the market perceives as “value-reducing.”Several prior studies have reported that would-be acquirers are significantly more likely to abandon takeover attempts when the market responds to the announcement of the proposed acquisition with a downward revision of the potential acquirer's stock price. A common interpretation of this finding is that “managers listen to the market.” But this begs the question: why do managers listen to the market?Our answer to that question is that acquirers’ top managers—their CEOs—have two sets of skin in the game. First, and perhaps obviously, the CEO owns stock in the acquiring company. Call this his financial capital. To the extent that cancellation of a proposed “value-reducing” takeover results in recovery of the announcement period stock price decline and the CEO owns shares in the company, the CEO stands to gain from that price recovery.Second, we propose that the CEO stands to gain from the recovery of his personal reputational capital that may also have been diminished as a result of the market's perception that the announced takeover attempt is value-destroying. The media influence the CEO's reputational capital by interpreting and disseminating information about the CEO's acquisition decisions. The worse the tone of the media coverage and the broader its dissemination, the greater the negative impact on the CEO's reputational capital. To the extent that the CEO's reputational capital has been diminished by media coverage of the takeover attempt, abandonment of that attempt may be associated with a recovery of that loss.Th","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"35 1","pages":"83-90"},"PeriodicalIF":0.9,"publicationDate":"2023-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12545","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50146496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

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Vanderbilt university roundtable on the capital structure puzzle 范德比尔特大学资本结构难题圆桌会议

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Journal of Applied Corporate Finance Pub Date : 2023-04-26 DOI: 10.1111/jacf.12539

Stewart Myers, John McConnell, Alice Peterson, Dennis Soter, Joel Stern

{"title":"Vanderbilt university roundtable on the capital structure puzzle","authors":"Stewart Myers, John McConnell, Alice Peterson, Dennis Soter, Joel Stern","doi":"10.1111/jacf.12539","DOIUrl":"https://doi.org/10.1111/jacf.12539","url":null,"abstract":"April 2, 1998 Nashville, TennesseeJOEL STERN: Good afternoon. I'm Joel Stern, managing partner of Stern Stewart & Co., and, on behalf of our hosts here at Vanderbilt's Owen Graduate School of Management, I want to welcome you all to this discussion of corporate capital structure. Before getting into our subject matter, let me take a moment to thank Hans Stoll for organizing this conference on “Financial Markets and the Corporation.” I also want to take this opportunity to salute Professor Martin Weingartner—in whose honor this conference is being held—at the conclusion of a long and productive career. Marty's contributions to the field of corporate finance are many and considerable; and, though he may be stepping down from his formal position, we expect to continue to hear from him for many more years.The subject of today's meeting is corporate capital structure: Does capital structure matter? And, if so, how and why does it matter? Although these questions have been seriously debated in the academic finance profession for almost 40 years, we seem to be no closer to a definitive answer than we were in 1958, when Merton Miller and Franco Modigliani published their article presenting the first of their two famous “irrelevance” propositions.Following the M&M propositions, academic researchers in the 1960s and 1970s turned their attention to various market “imperfections” that might make firm value depend on capital structure and dividend policy. The main suspects were (1) a tax code that encourages debt by making interest payments, but not dividends, tax deductible, and (2) expected costs of financial distress, including corporate underinvestment, that can become important as you increase the amount of debt in the capital structure. Toward the end of the 1970s, there was also discussion of “signaling” effects—for example, the tendency for the stock market to respond negatively to announcements of new stock issues.A defining moment in the academic capital structure debate came in 1984, when Professor Stewart Myers devoted his Presidential address to the American Finance Association to something he called “The Capital Structure Puzzle.” The puzzle was this: Most academic discussions of capital structure were based on the assumption that companies make financing decisions that are guided by a target capital structure—a proportion of debt to equity that management aims to achieve, if not at all times, then at least as a long-run average. But the empirical evidence suggested otherwise. Rather than adhering to targets, Professor Myers observed, most large U.S. public companies behaved as if they were following a financial “pecking order.” They were funding investment with retained earnings rather than external financing if possible; and if external funding was necessary, they issued debt first and equity only as a last resort.Since then, the capital structure debate has raged on. Harvard profess","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"35 1","pages":"38-49"},"PeriodicalIF":0.9,"publicationDate":"2023-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12539","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50144879","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

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MIPS, QUIPS, and TOPrS: Old wine in new bottles MIPS、QUIPS和TOPrS：新瓶装旧酒

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Journal of Applied Corporate Finance Pub Date : 2023-04-24 DOI: 10.1111/jacf.12541

Arun Khanna, John J. McConnell

{"title":"MIPS, QUIPS, and TOPrS: Old wine in new bottles","authors":"Arun Khanna, John J. McConnell","doi":"10.1111/jacf.12541","DOIUrl":"https://doi.org/10.1111/jacf.12541","url":null,"abstract":"Monthly Income Preferred Stock (MIPS), Quarterly Income Preferred Stock (QUIPS), and Trust Originated Preferred Stock (TOPrS) all carry the title of preferred stock. As in the case of other forms of preferred stock, if the issuer fails to make a promised periodic payment, investors cannot force the issuer into bankruptcy. Unlike conventional preferred stock, however, when the promised periodic payments are made, these new securities are deductible by the issuer for tax purposes. In short, MIPS, QUIPS and TOPrS appear to have the tax advantages of debt without the potential for bankruptcy with its attendant costs.Sounds like a good idea for corporate issuers. And between October of 1993—when Texaco, Inc. issued the first of this kind of security—and the end of 1997, at least 285 other corporate issuers came to that conclusion. In the aggregate, these issuers have raised in excess of $27 billion with the issuance of this novel hybrid security.But the novelty of MIPS, QUIPS and TOPrS may be more apparent than real. That is not to say that the issuers of MIPS, QUIPS, and TOPrS have been duped in any way. As we will describe in more detail later, MIPS, QUIPS, and TOPrS do present the promise of the tax advantages of debt coupled with the financial flexibility of preferred stock. But there is another security—namely, “income bonds”—that has offered these same advantages for at least the past 100 years. With an income bond, the issuer is obligated to pay interest if, but only if, the company's before-tax earnings exceed the interest payments that are due. And, if the interest payments are made, they are fully deductible for tax purposes. If the interest is not earned and, therefore, not paid, investors cannot force the issuer into bankruptcy.As described in an article called “The Income Bond Puzzle,” which appeared in a predecessor to this journal, income bonds were issued in the U. S. as early as 1873 and continued to be issued during the late 1800s in the course of various railroad reorganizations.1 Income bonds saw another brief flurry of activity during the 1930s, but have been essentially dormant for the past 60 years. The puzzle in the income bond puzzle is that a security that appears to combine the virtues of debt and preferred stock, and appears to dominate both, was nearly totally ignored by the corporate sector for 60 years. The recent volcanic eruption of MIPS, QUIPS, and TOPrS adds a further twist to the puzzle. These securities appear to offer nothing new. Why are they so popular while income bonds are ignored? The puzzle surrounding the dormancy of income bonds and the popularity of MIPS, QUIPS and TOPrS is actually a smaller part of a larger question: What are the forces that fuel evolution in the design of financial instruments?In this article, we do not fully answer either of these questions. Our ambitions are more modest.2 We describe MIPS, QUIPS, and TOPrS in greater detail and review their features in ","PeriodicalId":46789,"journal":{"name":"Journal of Applied Corporate Finance","volume":"35 1","pages":"50-54"},"PeriodicalIF":0.9,"publicationDate":"2023-04-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jacf.12541","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50142667","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

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