Labor Unions and Strategic Corporate Governance: A Balancing Act of Managerial Power and Entrenchment

2018 ◽  
Author(s):  
Keegan Woods ◽  
Kelvin Jui Keng Tan
Keyword(s):  
Corporate Governance ◽  
Labor Unions ◽  
Managerial Power

scholarly journals Corporate Governance Ideology, Human Resource Practices and Senior Staff Salaries

2021 ◽  
Author(s):  
Nicholas Black ◽  
Peter Stokes
Keyword(s):  
Corporate Governance ◽  
Human Resource ◽  
Common Sense ◽  
Human Resource Practices ◽  
Senior Staff ◽  
Staff Members ◽  
Hr Practices ◽  
Managerial Power ◽  
Corporate Goals ◽  
The Common

This chapter examines the link between corporate governance ideology and HR (human resource) practices involved in the important and ongoing issue of senior staff salaries. In the spirit of financialization and hyper-individuals, the mainstream corporate governance ideology promotes beliefs about competitive pay and managerial power. These beliefs shape the design and implementation of HR practices by legitimizing the ‘common-sense’ assumption that senior staff members should, primarily, be rewarded for meeting corporate goals. However, our discussion critiques the use of this corporate governance ideology for encouraging myopia and silence amongst remuneration committee members in response to growing inequality. This is exemplified by an inductive analysis of remuneration committee minutes taken from British universities (n = 67). Interestingly, this example also highlighted a marginalized belief about sacrificial leadership that countered this growth under alternative ideology in the spirit of altruism. The chapter recommends the radical proposal that remuneration committees should expand their remit beyond only considering senior staff salaries and promote HR practices that will embed altruism and equality.

Organized labor, corporate governance, and stock price crash risk

2017 ◽  
Vol 16 (4) ◽  
pp. 424-443 ◽  
Author(s):  
Qunfeng Liao ◽  
Bo Ouyang
Keyword(s):  
Corporate Governance ◽  
Least Squares ◽  
Labor Unions ◽  
Stock Price ◽  
Negative Impact ◽  
Labor Union ◽  
Ordinary Least Squares ◽  
Crash Risk ◽  
Content Type ◽  
Managerial Opportunism

Purpose The aim of the paper is to investigate the effect of labor strength on stock price crash risk and related moderating mechanisms. Design/methodology/approach To examine the relationship between labor unions and stock price crash risk and, more importantly, whether corporate governance moderates this relationship. Ordinary least squares (OLS), two-stage least squares, cross-sectional analyses, industry-level regressions and firm-level regressions are conducted. Findings The results suggest a negative impact of labor union strength on stock price crash risk. Further analysis suggests strong corporate governance mechanisms may mitigate the increased stock price crash risk in less-unionized firms. Originality/value Labor unions have a long-term horizon in the firm and have strong incentives to monitor managerial opportunism. However, labor unions may also increase financial reporting opacity and collude with managers to gain bargaining power in labor negotiations. The authors’ finding suggests that labor union strength is negatively associated with stock price crash risk. This finding is consistent with the notion that labor unions curb managerial opportunism in information disclosure, resulting in reduced crash risk. More importantly, the authors find corporate governance mitigates the negative impact of reduced unionization on crash risk, providing empirical support for recent regulatory efforts to strengthen corporate governance to prevent stock market crash.

scholarly journals Asymmetric pay-for-performance and corporate governance in the market downturn

2007 ◽  
Vol 4 (4) ◽  
pp. 193-205
Author(s):  
Tung-Hsiao Yang
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Executive Compensation ◽  
Pay For Performance ◽  
Market Performance ◽  
Debt Ratio ◽  
Supportive Evidence ◽  
Market Conditions ◽  
Managerial Power ◽  
Market Changes

This paper examines the pay-for-performance, corporate governance, and their connection by analyzing the change of executive compensation when the stock market changes from upturn to downturn. We provide the evidence to support the managerial power explanation for the change in executive compensation. We find the asymmetric pay-for-performance and corporate governance in different market conditions and different firm’s market performance. In addition, the outperformed firms reward CEO with more cash-based compensation and less stock-based compensation in the market downturn. Therefore, we conclude that the CEOs of outperformed firms have stronger managerial power than those of underperformed firms. We also find supportive evidence of our conclusion that the firms with lower debt ratio, smaller number of board meetings, and the presence of interlocked relationship have higher probability to be the outperformed firms. This evidence is consistent with the prediction of managerial power approach

scholarly journals Predicting corporate voting outcomes for shareholder sponsored proposals

2014 ◽  
Vol 12 (1) ◽  
pp. 742-758 ◽  
Author(s):  
Alexander H. Gnutti ◽  
John D. Martin ◽  
J. Douglas Ramsey
Keyword(s):  
Corporate Governance ◽  
Labor Unions ◽  
Firm Size ◽  
Institutional Ownership ◽  
Pension Funds ◽  
Board Structure ◽  
Share Ownership ◽  
Shareholder Proposals ◽  
The Impact

We analyze voting support for shareholder sponsored corporate governance proposals. Specifically, we study the impact of institutional share ownership, board structure, firm size, historical share performance, and proposal sponsor on the proportion of yes votes received. We use data from 253 shareholder proposals that came to a vote in 2013 for our analysis. Among our findings are the following: (1) pension funds sponsored 14 of the 20 proposals receiving the highest level of voting support while individuals and labor unions sponsored 16 of the 20 proposals receiving the lowest voting support; (2) firms with a classified board received higher proposal support than those without a classified board; (3) firms with a higher percentage of institutional ownership received greater voter support, and (4) firm size was inversely related to voting support

scholarly journals Does CEO make a better acquisition decision after SOX?

2014 ◽  
Vol 11 (2) ◽  
pp. 389-403
Author(s):  
Minhua Yang
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Stock Returns ◽  
Empirical Support ◽  
Compensation Package ◽  
Managerial Power ◽  
Restricted Stock ◽  
Abnormal Stock Returns ◽  
Compensation Packages ◽  
To Receive

We examine whether the changes in corporate governance lead to a better acquisition decision. SOX greatly improve the corporate governance which should reduce the non-value-maximizing behavior of acquiring managers. We find a significant increase in acquirer returns after the passage of SOX. We also find that CEOs with strong managerial power are more likely to receive more restricted stock in their compensation package after the 2002 reforms. Finally, I find a significant positive relation between the restricted stock compensation of acquiring firm CEOs and abnormal stock returns after 2002. This provides empirical support on the effectiveness of the shift away from options towards restricted stock in executive compensation packages. Restricted stock is associated with better merger decisions.

scholarly journals Executive Remuneration in New Zealand and Australia - Do Current Laws, Regulations and Guidelines Ensure "Pay for Performance"?

2006 ◽  
Vol 37 (1) ◽  
pp. 31
Author(s):  
Andreas Schoenemann
Keyword(s):  
Corporate Governance ◽  
New Zealand ◽  
Board Of Directors ◽  
Pay For Performance ◽  
Theoretical Background ◽  
Executive Directors ◽  
Executive Remuneration ◽  
Managerial Power ◽  
The Board Of Directors ◽  
Regulations And Guidelines

This article undertakes an examination of the current corporate governance frameworks relating to the remuneration of executives, and particularly executive directors, of listed companies in New Zealand and Australia. The theoretical background of the article builds on agency theory and managerial power theory. On this basis, performance-related remuneration is identified as crucial in aligning the divergent interests of shareholders and executives. Theories also suggest that the board of directors alone is not a sufficient mechanism to ensure that performance-related pay is implemented in practice. Examination of substantive remuneration rules regarding the structure and form of remuneration agreements finds that in both New Zealand and Australia the relevant problems are only sparsely addressed in enforceable law. More emphasis is put on procedural remuneration rules. Particularly in the fields of disclosure and shareholder involvement, Australia is a step ahead of New Zealand. 

scholarly journals Intellectual capital performance and cash-based incentive payments for executive directors: Impact of remuneration committee and corporate governance features

2005 ◽  
Vol 1 (3) ◽  
pp. 29-45
Author(s):  
Mitchell Van der Zahn ◽  
Inderpal Singh ◽  
Alistair Brown
Keyword(s):  
Corporate Governance ◽  
Latent Class Analysis ◽  
Intellectual Capital ◽  
Latent Class ◽  
Executive Directors ◽  
Class Analysis ◽  
Director Compensation ◽  
Listed Firms ◽  
Incremental Value ◽  
Managerial Power

We use a sample of 964 executive directors representing 354 Singapore publicly listed firms to examine linkage between firm performance and cash-based bonus payments. As a pooled OLS regression model may hide different models that characterize subsets of observations we use latent class analysis to further examine the data and to identify more specifically the influence of corporate governance features. Our latent class analysis results indicate that remuneration committees with members having their interests better aligned with shareholders (such as presence of a significant owner) appear more likely to consider the incremental value of tying executive director compensation to intellectual capital performance. Remuneration committees with a lower risk of influence from managerial power were also found to be more likely to support a compensation linkage for executive directors to intellectual capital performance. The influence of the remuneration committee features is evident for both entrepreneurial and traditional firms. Overall, our findings are consistent with both the optimal-contract pricing and managerial power views of executive compensation setting.

scholarly journals Does Managerial Power Increase Selective Hedging? Evidence from the Oil and Gas Industry

2019 ◽  
Vol 12 (2) ◽  
pp. 71
Author(s):  
Jankensgård
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Opportunistic Behavior ◽  
Gas Industry ◽  
Inside Ownership ◽  
Power Increase ◽  
Managerial Power

This study examines the managerial power-hypothesis of selective hedging, which holds that selective hedging is observed more frequently in companies where managers have greater latitude to execute hedging proposals without serious scrutiny or questioning. The hypothesis is tested using hand-collected data on corporate governance and derivative positions from the oil and gas industry. The results support the view that managerial power increases selective hedging. The main governance dimension associated with selective hedging is the extent of inside ownership. Firms with high inside ownership have excessive variability in their derivative portfolios, were more prone to opportunistic behavior following the great rise in the oil price in the mid-2000s, and have lower realized cash flow from hedging.

scholarly journals Realigning Corporate Governance: Shareholder Activism by Labor Unions

1998 ◽  
Vol 96 (4) ◽  
pp. 1018 ◽  
Author(s):  
Stewart J. Schwab ◽  
Randall S. Thomas
Keyword(s):  
Corporate Governance ◽  
Labor Unions ◽  
Shareholder Activism
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