Corporate governance, ownership, and risk management

This thesis examines how corporate governance and ownership characteristics relate to firm ESG performance, disclosure, and the ensuing effects on financial performance and corporate risk management using several unique datasets and diverse methodologies. I consider the effects of stewardship codes and mandatory ESG reporting requirements on ESG disclosure and quality. The preferences for various categories of institutional investors for firm ESG characteristics are examined with relationship to public equities as well as investments in alternative asset classes. I examine the effects of corporate governance and ownership features on risky firm behavior and then the resulting market reactions and cost of capital effects in the wake of regulatory fines. Finally, I consider the relationship between corporate governance and risk management in the context of firm captive insurance usage. This thesis contributes to prior academic literature on how ownership characteristics and corporate governance impact company ESG disclosure and quality as well as the linkages between corporate governance and financial performance and risk management. From a policy perspective, the results provide evidence of the beneficial impacts of ESG on risk management and financial performance. Furthermore, the considerations of different company ownership characteristics as well as various legal and regulatory environments with respect to ESG disclosure by companies and institutional investors can help inform appropriate policy tools for fostering the beneficial effects of improved ESG quality

Corporate governance, ownership, and risk management

This thesis examines how corporate governance and ownership characteristics relate to firm ESG performance, disclosure, and the ensuing effects on financial performance and corporate risk management using several unique datasets and diverse methodologies. I consider the effects of stewardship codes and mandatory ESG reporting requirements on ESG disclosure and quality. The preferences for various categories of institutional investors for firm ESG characteristics are examined with relationship to public equities as well as investments in alternative asset classes. I examine the effects of corporate governance and ownership features on risky firm behavior and then the resulting market reactions and cost of capital effects in the wake of regulatory fines. Finally, I consider the relationship between corporate governance and risk management in the context of firm captive insurance usage. This thesis contributes to prior academic literature on how ownership characteristics and corporate governance impact company ESG disclosure and quality as well as the linkages between corporate governance and financial performance and risk management. From a policy perspective, the results provide evidence of the beneficial impacts of ESG on risk management and financial performance. Furthermore, the considerations of different company ownership characteristics as well as various legal and regulatory environments with respect to ESG disclosure by companies and institutional investors can help inform appropriate policy tools for fostering the beneficial effects of improved ESG quality

Corporate governance, ownership, and risk management

This thesis examines how corporate governance and ownership characteristics relate to firm ESG performance, disclosure, and the ensuing effects on financial performance and corporate risk management using several unique datasets and diverse methodologies. I consider the effects of stewardship codes and mandatory ESG reporting requirements on ESG disclosure and quality. The preferences for various categories of institutional investors for firm ESG characteristics are examined with relationship to public equities as well as investments in alternative asset classes. I examine the effects of corporate governance and ownership features on risky firm behavior and then the resulting market reactions and cost of capital effects in the wake of regulatory fines. Finally, I consider the relationship between corporate governance and risk management in the context of firm captive insurance usage. This thesis contributes to prior academic literature on how ownership characteristics and corporate governance impact company ESG disclosure and quality as well as the linkages between corporate governance and financial performance and risk management. From a policy perspective, the results provide evidence of the beneficial impacts of ESG on risk management and financial performance. Furthermore, the considerations of different company ownership characteristics as well as various legal and regulatory environments with respect to ESG disclosure by companies and institutional investors can help inform appropriate policy tools for fostering the beneficial effects of improved ESG quality

Tax avoidance and financial crimes in the Netherlands: The effect of the FinCEN leak on banks

Financial crimes have been an increasing concern to regulators but arguably a greater concern to shareholders of banks. We exploit a media leak of suspicious activity reports (SARs), as part of the FinCEN files, to examine the market value of banks. We find that the market reacted negatively to Dutch financial institutions with exposure to the leak. Moreover, we find significant abnormal returns within the time span between September 19 to September 22. Over the longer horizon, we document that the leak had little impact on shareholder value. Our findings support the view that the stock market drop following the FinCEN leak is largely due to regulatory penalties for past activities or potential litigation risk

Tax avoidance and financial crimes in the Netherlands:The effect of the FinCEN leak on banks

Financial crimes have been an increasing concern to regulators but arguably a greater concern to shareholders of banks. We exploit a media leak of suspicious activity reports (SARs), as part of the FinCEN files, to examine the market value of banks. We find that the market reacted negatively to Dutch financial institutions with exposure to the leak. Moreover, we find significant abnormal returns within the time span between September 19 to September 22. Over the longer horizon, we document that the leak had little impact on shareholder value. Our findings support the view that the stock market drop following the FinCEN leak is largely due to regulatory penalties for past activities or potential litigation risk