Does Good Governance Matter to Institutional Investors? Evidence from the Enactment of Corporate Governance Guidelines

Corporate governance guidelines are a mechanism that a firm can enact which should reduce agency costs and better align the interests of boards and the suppliers of capital. This study examines stock price reactions primarily attributable to institutional investors occurring when corporations announce the enactment of corporate governance guidelines. A final sample of 77 firms was derived from the first announcement of corporate governance guidelines exclusive to the SEC-EDGAR database. The results indicate that good governance does matter. Firms that announced the enactment of corporate governance guidelines experienced increased stock prices following the announcements. There was an immediate (days 1–4) reaction for firms that provided all or part of the guidelines’ substance; a delayed (days 8–10) reaction occurred for those firms that only referenced the guidelines’ enactment. Additionally, firms with either a potentially greater following or that had a previous history of acrimonious relations with stakeholders were rewarded by the announcement of the enactment of guidelines.     

Seasonality in industry specific indices

This study examines seaonality in three industry specific stock market indices; the Standard and Poor's (S&P) 20 Transportation, the S&P 40 Utilities, and the S&P 40 Financial. The results support the existence of a weekend effect in the transportation index. There is no evidence of a weekend effect in the utilities and financial indices. Both the transportation and financial indices exhibit the January effect. The utilities index, however, shows no evidence of a January effect. The finding of a weekend and a January effect at the industry level is significant because select mutual funds enhance the ability of investors to capitalize on such anomalies.     

Rethinking the Business School*

It is ironic that at a moment in history when the business school seems to be enjoying unparalleled success, the role of the business school is being increasingly questioned by some of its leading professors. We examine the debate about the business school and its evolution. While sympathetic to the criticisms levied against the business school we nevertheless suggest a positive future if the business school can build upon its potentially unique position as knowledge space.     

Management Research and the New Logics of Discovery and Engagement

This paper develops an argument that leads to a vision of management research as a form of design science. Such an approach to research requires an inversion of the relationship between rigour and relevance. Giving primacy to the pursuit of rigour, as tends to be the current norm, de-emphasizes the importance of relevance and leads to research that interests very few beyond the community of management scholars. We argue that we should re-imagine relevance as a necessary condition for rigour and that this will lead to new forms of engagement with theory and practice that have the potential to create a new science of management.