Should managers be liable for ill-conceived business decisions? One answer is given by U.S. courts, which almost never hold managers liable for their mistakes. In this paper, we address the question in a theoretical model of delegated decision making. We find that courts should indeed be lenient as long as contracts are restricted to be linear. With more general compensation schemes, the answer...

Performance pay, at least as usually understand, is no good idea for non-executive directors. They have to supervise and control or in some situations even to fire and replace the executive managers. This means that their performance as supervisors is totally different from the performance of the supervised executive managers and even the company at large. Moreover, they are mostly interested i...

A number of recent national and EU initiatives have sought explicitly to encourage innovative firms and venture capital finance. In keeping with the policy debate, this paper focuses explicitly on the role of law and lawyers in facilitating venture capital: that is, both supply by investors, and demand by entrepreneurs. It reviews existing literature in a way that seeks to clarify the links bet...

It has been suggested that mergers, by increasing concentration, raise incentives to invest and hence are pro-competitive. To study the effects of mergers, we rewrite a game with simultaneous price and cost-reducing investment choices as one where firms only choose prices, and make use of aggregative game theory. We find no support for that claim: absent efficiency gains, the merger lowers tota...

An evaluation problem exists when winding up executory contracts in case of insolvency. The trustee has difficulties in accurately considering the claim for damages that arises if he chooses to reject a contract instead of accepting it. An unequal treatment of creditors and inefficiencies follow. However, a simple reform can solve this problem. If an executory contract is accepted by the truste...

We examine whether firms pursue target board structures. Using a broad panel from 1991–2003, we find that board changes are frequent, with two-thirds of firms changing board size or independence during a two-year period. Board changes are associated with changes in firm-specific fundamentals. The rate of change is positively associated with the benefits of effective boards and negatively associ...

Polyurethane-resin doming is currently one of the fastest growing markets in the field of industrial graphics and product identification. Semi-rigid bio-based polyurethanes were prepared deriving from soybean oil as a valuable alternative to fossil materials for digital doming and applied to digital mosaic technology. Bio-resins produced can favorably compete with the analogous fossil polymers,...

ABSTRACT We examine outside board appointments of executives allegedly involved in governance failures—“tainted” executives—to shed light on appointing firms’ underlying motivations. Less attractive firms and those with greater advising needs are more likely to appoint tainted their boards than other are. Tainted appointees less be placed the nominating committees nontainted appointees. have si...

Capsule is an important virulence factor in bacteria. A total of 78 capsular types have been identified in Klebsiella pneumoniae. However, there are limitations in current typing methods. We report here the development of a new genotyping method based on amplification of the variable regions of the wzc gene. Fragments corresponding to the variable region of wzc were amplified and sequenced from...