Determinants of Board Structure: A Comparison of Publicly-Traded and Privately-Owned Insurance Companies

Author(s):  
Enya He ◽  
Steve Miller ◽  
Tina Yang
Author(s):  
Brenda Hannigan

This chapter discusses corporate governance in publicly traded companies with widely dispersed shareholdings. Most shareholders are not involved in the management and control of a company's affairs. Thus, a separation usually develops between those who collectively own the company through their combined shareholdings (the shareholders) and those who manage it (the directors). Problems can arise from this separation of ownership and control as distance from the day-to-day running of the business makes it difficult for shareholders to restrain any managerial excesses. The starting point of good corporate governance is internal mechanisms (such as shareholders' rights and board structures). The discussions cover the UK corporate governance code, corporate governance requirement, board committees, and shareholder engagement.


1998 ◽  
Vol 57 (2) ◽  
pp. 442-452 ◽  
Author(s):  
J. Ray Bowen ◽  
David C. Rose

In a recent article in this journal, William C. Kirby (1995) chronicled the development of China's Company Law, which was crafted in 1904 to promote industrial development by codifying a commercial code. Among other objectives, the Company Law was aimed at providing institutional support for the emergence of modern legal corporations. Indeed, it was a widespread belief among the Qing reformers of the period that “Modern industrial capitalism … demanded Western corporate structures to do business’ (Kirby 1995, 43). Kirby argued that after numerous revisions it has become clear that the Company Law has failed to promote the emergence of privately owned, publicly traded corporations. Given China's rich commercial tradition, its dramatic post-1978 reforms, and its rapid economic growth over the last two decades, Kirby's finding raises a most puzzling question for China scholars: Why is there not a single privately owned, publicly traded corporation (PPC) in mainland China?


2012 ◽  
Vol 10 (2) ◽  
pp. 97
Author(s):  
Denis O. Boudreaux ◽  
Praveen Das ◽  
Nancy Rumore ◽  
SPUma Rao

A companys cost of capital is the average rate it pays for the use of its capital funds. Estimating the cost of equity capital for a publicly traded firm is much simpler than estimating the same for a small privately held firm. For privately owned firms there is the lack of market based financial information. In business damage cases, valuation of the firm is often a prime interest. A necessary variable in the valuation process is the estimate of the firms cost of capital. Part of the cost of capital is the equity holders or owners required rate of return. The purpose of this paper is to explore the theoretical structure that underlies the valuation process for business damage cases that involve privately owned businesses. Specifically, cost of equity capital estimate methods which appear in the current literature are examined, and a theoretically correct and simple method to measure cost of equity capital for closely held companies is offered.


2020 ◽  
Vol 5 (4) ◽  
pp. p68
Author(s):  
Wenjing Wang ◽  
Arthur S. Guarino

For many investors, dividends play a key role in evaluating the return of a common stock and the main reason for making the investment. For those investors, dividends are a necessary aspect since they are a vital source of income. But with the Covid-19 pandemic, many corporations have been adversely affected by a global economic slowdown. For publicly traded corporations, depending on its industry, dividends have been sharply affected to the point of either being reduced or suspended indefinitely. Using the Standard and Poor’s 500 stock index as a guide, stock analysts can possibly acquire a better understanding as to how reduced or suspended dividend income will affect different investors. The aim and purpose of this paper is to examine the affect the reduction and suspension of dividends will have as a source of needed income for private investors, pension funds, mutual funds, insurance companies, and real estate investment trusts.


Author(s):  
Mitchell Petersen ◽  
Robert O'Keef

West Teleservice, a telemarketing firm, is considering going public at the end of 1996. Asks students to price the IPO. During the previous 18 months, seven other telemarketing firms have gone public. Prior to this, there were no publicly traded telemarketing firms. The industry is in flux. Historically, wholly owned subsidiaries of telephone companies, banks, and insurance companies conducted telemarketing. However, cost cutting caused many of these firms to outsource the business. Thus, although total telemarketing business isn't growing very quickly, the outsourced portion is growing 50% per year.To introduce IPO valuations; to demonstrate the use and pitfalls of valuing firms with multiples–given this is the eighth firm to go public, there are seven other potential comparable firms; to construct a rough DCF; to demonstrate what assumptions must be implicit in the multiples to arrive at the same valuation; and to discuss the idea of mispriced equity, given some evidence suggesting that the price of equity is not sustainable.


Blood ◽  
2020 ◽  
Vol 136 (Supplement 1) ◽  
pp. 15-16
Author(s):  
Feng Wang ◽  
Shannon Ferrante ◽  
Eric M Maiese ◽  
Jenny Willson ◽  
Chi-Chang Chen ◽  
...  

Introduction: Some novel cancer and supportive care therapies, such as chemotherapy, steroids, and immunotherapies, are known to cause eye-related side effects such as dryness or altered vision (Fu et al Oncotarget 2017). However, there is a paucity of evidence documenting their disease burden in practice. The aim of this retrospective, cohort study was to assess the incidence, and clinical and economic burden of managing ocular events (OEs) in patients receiving multiple myeloma (MM) treatment in clinical practice. Methods: A cohort of adult patients with MM was identified from a large U.S. insurance claims database (IQVIA PharMetrics® Plus database), which is sourced from commercial insurance companies. Incidence, outpatient care, emergency room (ER) visits, hospitalizations, and costs were assessed for 5 OEs of interest: keratopathy/keratitis, blurred vision/decreased acuity, dry eye, eye pain, and photophobia. These OEs were identified by cross-walking from MedDRA 'corneal disorders' codes to international classification of disease (ICD) codes, which were confirmed by clinical experts. Incidence of OEs was assessed as the proportion of patients with OE after MM treatment initiation who did not have diagnosis indicative of OE in the 12-month baseline period. Descriptive analyses were performed, and resource utilization and costs (in US dollars) were reported on a per-patient-per-month (PPPM) basis. A separate cohort of hematology patients (N=26,923) was identified from the same database. The results were benchmarked against this larger cohort of patients. Results: Of the 2120 patients with incident MM (mean [SD] age: 60.2 [9.8]) included in the cohort, 248 (11.7%) patients had at least 1 incident OE during an average of 29.8 months of follow-up after initial MM treatment. Proportion of patients with at least 1 incident OE was 7.4% in the benchmark hematology cohort. Dry eye (n=129, 6.1%), blurred vision/decreased acuity (n=73, 3.4%), and keratopathy/keratitis (n=52, 2.5%) were the most frequent OEs observed. The incidence remained largely constant across baseline demographic characteristics, comorbid conditions, and lines of MM therapies. Most incident OEs were diagnosed in the outpatient (OP)/physician's office setting by ophthalmologists (69.5%), except for blurred vision, which was predominantly diagnosed in non-ophthalmologist/non-optometrist setting. Median PPPM costs for managing OEs was $27, which is <1% of median all-cause costs during the follow-up period (median total all-cause PPPM costs: $17,286; median MM-related PPPM costs: $13,851). These costs were predominantly contributed by OP care (median PPPM cost: $19), including prescriptions (median PPPM cost: $16). ER visits (median PPPM cost: $66) and inpatient visits (median PPPM cost: $16) were uncommon (Table). Median PPPM costs for managing these OEs in hematology cohort was $20. Conclusions: Incident OEs were observed in ~12% of patients receiving treatment for MM based on real-world data, with the most common OEs being keratopathy/keratitis, dry eye, and blurred vision. When evaluated from the perspective of median PPPM costs, the clinical and economic burden for treating OEs was very low when compared with total all-cause PPPM costs or MM-related PPPM costs. The vast majority of these OEs require only OP care. ER visits or inpatient care were extremely rare. Further real-world evidence is warranted to assess the relationship between OEs and MM treatment. Funding: GSK (study: 208295). Table. Median OE-related PPPM Costs (US Dollars) in Incident MM Cohort (N=2,120) Table Disclosures Wang: GSK: Current Employment, Current equity holder in publicly-traded company. Ferrante:GSK: Current Employment, Current equity holder in publicly-traded company. Maiese:GSK: Current Employment, Current equity holder in publicly-traded company. Willson:GSK: Current Employment, Current equity holder in publicly-traded company. Chen:GSK: Consultancy, Research Funding. Nunna:GSK: Consultancy, Research Funding. Sun:GSK: Consultancy, Research Funding. Kleinman:GSK: Consultancy; Eyeon Therapeutics, LLC.: Current equity holder in private company; Triphase Accelerator U.S Corporation: Consultancy; ONL Therapeutics, Inc: Consultancy; Revolution Medicines, Inc: Consultancy; Editas Medicine, Inc: Consultancy; Cleave Therapeutics, Inc: Consultancy; Coherus Biosciences, Inc: Consultancy; Synergy Research Inc: Consultancy; Zenith Epigenetics Ltd: Consultancy. Sansbury:GSK: Current Employment, Current equity holder in publicly-traded company.


2018 ◽  
Vol 14 (2) ◽  
pp. 305-341 ◽  
Author(s):  
Yunhe Li ◽  
Xiaotian Tina Zhang

ABSTRACTUsing data from China's listed privately owned enterprises (POEs) during the period from 2002 to 2014, we explore the effects of firm life cycle on board structure. We find that the board size of China's listed POEs declines over firm life cycle, and there is a trend of separation for board chair-CEO duality while board independence remains almost static. We further provide evidence that board size and independence are determined by the benefits of monitoring and advisory roles of the boards through all the stages of firms’ life cycle with different drivers. The impact of CEO power on board chair-CEO duality is determined by the benefits and costs of separation of board chair, and CEOs are supported at all stages of firms’ life cycle. This article sheds light on the dynamic board structure in an emerging economy where the external corporate governance is weaker than that of developed countries. Our findings suggest that the board structures of China's listed POEs are adjusted at various stages of firms’ life cycle, and the adjustments are mostly based on the resources brought by the new board of directors.


2018 ◽  
Vol 13 (1) ◽  
Author(s):  
Daniel Ames ◽  
Bryan S. Graden ◽  
Jomo Sankara

Abstract The ability of an insurer to pursue and collect money from responsible third parties for paid claims is referred to as subrogation. For some insurers, the amount to be recovered may be significant and, if accrued for, represents an estimate that could be used by management to affect earnings. This study investigates factors associated with insurers’ choice to accrue subrogation for statutory accounting. For statutory accounting, where insurers can choose whether to accrue subrogation or exclude it as an offset to the claims liability, we find that publicly-traded (mutually-owned) insurers are significantly more (less) likely to accrue subrogation than privately-owned insurers. In addition, we find that publicly-traded (mutual) insurers with weak ratings are less (more) likely to accrue subrogation. Finally, we find that insurers with large amounts of subrogation are more likely to accrue subrogation, consistent with these types of insurers having the strongest incentive to influence earnings through the subrogation accrual. Our results provide evidence suggesting that insurers respond to their incentives when choosing whether to accrue subrogation for statutory reporting.


2021 ◽  
Vol 22 (2) ◽  
pp. 922-940
Author(s):  
Yunieta Anny Nainggolan ◽  
Endang Dwi Astuti ◽  
Raden Aswin Rahadi ◽  
Kurnia Fajar Afgani

This paper aims to investigate the influence of political connection on Corporate Social Responsibility (CSR) expense in Indonesia. We use a sample of 682 firm-year observations between 2010 and 2015. Using the individual-level of political connections, we find that the political connection is an important determinant of CSR expense. The political connection effect is analyzed based on the different characteristics of ownership structure, board structure, and affiliated party. We find that state-owned enterprises and privately-owned enterprises that politically connected are positively associated with CSR expenses. Interestingly, the evidence shows that politically connected board of commissioners are more willing to spend in CSR activities, while politically connected board of directors have no significant concern regarding CSR. Furthermore, politically connected firms that contribute to CSR are from government-leaning firms, while opposition-leaning firms show different matters. The findings are robust using different measures of political connection and controls.


2006 ◽  
Vol 26 (2) ◽  
pp. 105-136 ◽  
Author(s):  
Dennis K. K. Fan ◽  
Raymond W. So ◽  
Jason J. Yeh

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