Market reactions to appointment of audit committee directors post-SOX: A note

In recent years, legislators and regulators have evinced significant interest in issues related to audit committee composition. Prior research finds that, in the pre-SOX period, the stock market reacts favorably to the appointment of expert directors to the audit committee. In the post-SOX period, almost all companies have financial experts on audit committees; hence, the signaling value of appointing an expert may be less valuable in the post-SOX period. Using a sample of 452 audit committee director appointments in 2004, 2006 and 2008, we find that the market reaction to the appointment of different types of expert directors is not significantly different from zero.     

Uber Drivers and Employment Status in the Gig Economy: Should Corporate Social Responsibility Tip the Scales?

As the gig economy continues to grow, the legal status of its workers remains a source of confusion and controversy. Uber and other transportation network companies (TNCs) typically disclaim employee status, depriving drivers of social insurance among other benefits. Further, such companies typically deny liability to third party victims for damages due to auto accidents, sexual assaults, and other negative outcomes arising out of their business. Legal and regulatory systems in the U.S. and elsewhere continue to struggle with how to determine and apply a consistent standard as to employee classification. We argue that corporate social responsibility should figure prominently in the equation. Private companies already are required to cover social costs of doing business in a variety of contexts (e.g., workers compensation, family leave, public and workplace accommodations for disabled individuals), and it makes sense that they also should be required to underwrite other important implications associated with employee status as part of their responsibilities to society. This is especially so where, as with Uber and other TNCs, a company’s core profit-making operations include activities that carry the direct potential for causing substantial harm both to individual clients and to the public at large.     

Managing the boundary spanner—Customer turnover connection

Service-providing boundary spanners are becoming increasingly important in modern organizations. Minimizing the turnover of effective boundary spanners is clearly important, but since some turnover is inevitable, organizations must deal with turnover's consequences as well as its causes. In this article we propose a model for examining and managing one of the most important of those consequences: the increased risk of losing customers as a result of the loss of a boundary spanner who dealt with that customer. In some cases the customer actually follows the boundary spanner to a new organization, in others the loss of the boundary spanner simply prompts the customer to begin searching for alternative service providers. Our model is based on a distinction between customer perceptions of the non-imitability of a firm and the non-imitability of an individual boundary spanner. We present several suggestions as to how two levels of HR managers—the HR executive and the operating level HR manager—can work together to manage the problem.