GOV · Corporate Governance

The objective of this proposal is to apply for an ERC Starting Grant to support a careful study of the design and implications of corporate governance. Corporate governance is the set of mechanisms that are designed to address the conflicts between the managers and owners of assets when there is a separation of ownership and control. These mechanisms are intended to monitor the person who has control over the assets so that the use of the assets does not conflict with the incentives of the owners of the assets. Boards of directors, institutional shareholders, and the market for corporate control are some examples of corporate governance mechanisms that are expected to mitigate the potential conflicts between owners and the managers. Based on the prior work of others and my own, I am convinced that an attempt to measure the role of the individual style and preferences in corporate decision making and corporate governance will be fruitful. The series of research I conducted so far developed my perspective as a researcher, making me appreciate better the importance of capturing, to the extent possible, the entirety of the construct of interest. Given my current research interests, I propose to undertake the following three categories of research to understand: (1)how the individual style; and (2) inter-group dynamics aspect of corporate governance play a role in corporate decision making and outcomes, and (3) to evaluate (and be able to make future recommendations) about the regulation of corporate governance. The overarching objective of this proposal is to expand our thinking of corporate governance to include the human element in the design of mechanisms and contracts.