Edging toward ‘reasonably’ good corporate governance

Over four decades, research and policy have created layers of understandings in the quest for “good” corporate governance. The corporate excesses of the 1970s sparked a search for market mechanisms and disclosure to empower shareholders. The UK-focused problems of the 1990s prompted board-centric, structural approaches, while the fall of Enron and many other companies in the early 2000s heightened emphasis on director independence and professionalism. With the financial crisis of 2007-09, however, came a turn in some policy approaches and in academic literature seeking a different way forward. This paper explores those four phases and the discourse each develops and then links each to assumptions about accountability and cognition. After the financial crisis came pointers n policy and practice away from narrow, rationalist prescriptions and toward what the philosopher Stephen Toulmin calls “reasonableness”. Acknowledging that heightens awareness of complexity and interdependence in corporate governance practice. The paper then articulates a research agenda concerning what “reasonable” corporate governance might entail

Atomic diffusion induced by stress relaxation in InGaAs/GaAs epitaxial layers

The origin of the microscopic inhomogeneities in InxGa12xAs layers grown on GaAs by molecular beam epitaxy is analyzed through the optical absorption spectra near the band gap. It is seen that, for relaxed thick layers of about 2.8 mm, composition inhomogeneities are responsible for the band edge smoothing into the whole compositional range (0.05,x,0.8). On the other hand, in thin enough layers strain inhomogeneities are dominant. This evolution in line with layer thickness is due to the atomic diffusion at the surface during growth, induced by the strain inhomogeneities that arise from stress relaxation. In consequence, the strain variations present in the layer are converted into composition variations during growth. This process is energetically favorable as it diminishes elastic energy. An additional support to this hypothesis is given by a clear proportionality between the magnitude of the composition variations and the mean strain

Behavioral agency theory: new foundations for theorizing about executive compensation

This article describes new micro-foundations for theorizing about executive compensation, drawing on the behavioral economics literature and based on a more realistic set of behavioral assumptions than those that have typically been made by agency theorists. We call these micro-foundations “behavioral agency theory.” In contrast to the standard agency framework, which focuses on monitoring costs and incentive alignment, behavioral agency theory places agent performance at the center of the agency model, arguing that the interests of shareholders and their agents are most likely to be aligned if executives are motivated to perform to the best of their abilities. We develop a line of argument first advanced by Wiseman and Gomez-Mejia and put the case for a more general reassessment of the behavioral assumptions underpinning agency theory. A model of economic man predicated on bounded rationality is proposed, adopting Wiseman and Gomez-Mejia’s assumptions about risk preferences, but incorporating new assumptions about time discounting, inequity aversion, and the trade-off between intrinsic and extrinsic motivation. We argue that behavioral agency theory provides a better framework for theorizing about executive compensation, an enhanced theory of agent behavior, and an improved platform for making recommendations about the design of executive compensation plans