This dissertation examines the effects that intangible capital and diversity reputation have on firm performance. In Chapter 1, entitled “CEO Overconfidence and Intangible Corporate Investments,” we extend the corporate investment and CEO overconfidence literature by examining how CEO overconfidence affects investment-cashflow sensitivity using a new measure of Tobin’s q and cashflow. Specifically, we incorporate intangible capital, which neo-classical investment theory mostly ignores, in the empirical analysis. We develop three overconfidence measures and their interaction with the respective standard and new cashflow settings to capture the investment-cashflow sensitivity effect of CEO overconfidence. We use three investment measures (physical, intangible, and total investments) and find that the effect of managerial overconfidence on investment-cashflow sensitivity is more prominent for corporate intangible investments than physical investments. Moreover, our results show that the standard measure of physical capital weakly explains the intangible investment-cashflow density. Our study offers useful insights in that it explains the reason why investment-cashflow sensitivity has been weaker in recent years. We also show that investment-cashflow sensitivity is stronger when intangible capital is incorporated into the analysis. Chapter 2 is entitled “Diversity Reputation and Firm Performance.” The modern American workplace is a microcosm of modern American society. The increasing diversity of the American workforce has made the increasing diversity of the American workplace a necessity. We explore the impact of diversity reputation on firm performance. We measure a firm’s diversity reputation by its inclusion in DiversityInc’s list of Top 50 Companies for Diversity. We measure firm performance by various accounting measures (return on assets, return on investment, and return on sales) as well as one market-based measure, Tobin’s Q. We find that firms that have a better diversity reputation outperform firms that do not.

The literature on short selling documents substantial evidence that short sellers are generally informed investors (e.g., Diamond and Verrecchia, 1987; Asquith and Muelbrook, 1996). This dissertation investigates three specific implications of informed short selling for a firm and its investors. The first essay investigates if short selling discourages managers from pursuing over-optimistic projects by reducing equity market timing. By conditioning short selling on firm overvaluation, this essay shows that short selling reduces managerial equity market timing and increases leverage. This moderating impact of short selling is more pronounced in smaller firms and those with low institutional ownership or higher intangible assets. Furthermore, the results show that board independence facilitates the above effect of short selling which helps protect shareholder interests. The second essay investigates if board independence reduces informed short selling prior to earnings announcements. This essay estimates short sellers’ correct prediction of the direction of unexpected quarterly earnings through Logistic regression and finds that short sellers’ correct prediction decreases in firms with independent boards relative to firms with non-independent boards. Furthermore, this effect is more pronounced in firms with CEO duality and large board size. The quasi-natural experiment using the exogenous shock to board independence from the Sarbanes-Oxley Act of 2002, provides further support to our hypotheses. The third essay provides Sell recommendations by examining pre-announcement short selling of firms ahead of their earnings announcements. The methodology makes Sell recommendations for firms with the highest short position prior to their quarterly earnings announcement. The post-announcement raw, excess, and abnormal returns of firms having the Sell recommendations are statistically and economically significant for multiple-holding periods showing the methodology’s significant trading strategy implication. This dissertation significantly contributes to short selling, governance, capital structure, and investment literature.

Bakgrund: Samhället behöver ledare inom många olika områden för att utvecklas och förändras. Dessa personer har visat sig ha gemensamma beteenden så som att sätta tydliga mål, finna ett inre syfte och ha passion i det som de gör. Då alla handlingar som utförs av en människa drivs av ett motiv är det intressant att studera vad som motiverar dessa personer. Denna studie har avgränsats till att studera verkställande direktörer. Syfte: Syftet med denna studie är att förstå hur svenska verkställande direktörer beskriver sin motivation utifrån sitt eget perspektiv och således bidra till ökad förståelse för vad som motiverar dessa. Genomförande: Studien är en kvalitativ flerfallstudie med en induktiv forskningsansats. Det empiriska materialet i denna studie är insamlad genom semistrukturerade intervjuer med fyra stycken verkställande direktörer i Sverige. Resultat: Resultatet av denna studie visar att de faktorer som motiverar de verkställande direktörerna, utifrån deras eget perspektiv, varierar. Studien visar tydligt att de verkställande direktörerna främst motiveras av någonting “extra” i deras arbete. Samtliga verkställande direktörer nämnde var för sig att de motiveras starkt av deras respektive företag, utveckling och förändring. / Background: The society need leaders in many different areas to be able to develop and change. These individuals have some common behaviour, such as setting clear goals, finding an inner purpose and having passion for what they do. Since all action by a human being are driven by a motive, it is interesting to study what motivates these people. This essay has been limited to study CEOs. Purpose: The purpose of this study is to understand how Swedish CEOs describe their motivation from their own perspective and contribute to increased understanding of what motivates them. Design: This study is a qualitative multi-case study with an inductive research approach. The empirical material in this study is collected through semi-structured interviews with four different executive directors in Sweden. Conclusion: The result of this study shows that the motivating factors varies between the CEOs. The CEOs are mainly motivated by something “extra” in their work. All of the CEOs separately mentioned that they are strongly motivated by their companies, by development and by change.

Due to various corporate scandals and failures, there has been a renewed interest on the role of boards in the performance of firms. This thesis examines the relationship between the key board characteristics and firm performance. Unlike most studies on boards which predominantly use only financial variables affecting governance, I take a different approach by combining them with non-financial variables. This combined set of variables is used for theoretical and empirical modelling. Based on the extant literature, I develop a conceptual framework and a set of hypotheses to examine the relationship between board characteristics and firm performance. Board characteristics considered in this research include board size, director ownership, CEO duality, gender diversity, educational qualification of board members and number of board meetings. Additionally, I use board size as a moderating variable to examine how the effect of other board characteristics is contingent on board size. Firm performance is measured by return on assets. I test my hypotheses on a longitudinal sample of 156 firms over a four year period from 2004 to 2007. My sample includes all firms listed on New Zealand stock exchange as on November 2007. Empirical analysis is undertaken using Generalised Least Squares analyses. The findings of the study show that board characteristics such as board size, CEO duality and gender diversity were positively related with firm performance, where as director ownership, board meetings and the number of board members with PhD level education was found to be negatively related. Board size was found to be moderating some of these relationships, indicating the critical role being played by board size in the design and role of corporate boards. The findings also provide partial evidence to different governance theories, further indicating the need for theoretical pluralism to gain insights into boards’ functioning. The study contributes to the understanding of board-performance link by examining both the traditional variables such as board size, CEO duality, and number of board meetings as well as other organisational attributes such as gender diversity and competence variables represented by women and PhD holders, respectively. The theoretical framework and the findings of my thesis are expected to stimulate scholars for further research to identify the contingency conditions upon which the board characteristics and firm performance may be dependent.

<p><strong>Bakgrund:</strong> Konflikterna mellan ägarnas och företagsledningens intressen har varit ett aktuellt ämne länge och vi befinner oss nu i en ny fas som kännetecknas av en tydlig betoning på att företaget i första hand måste drivas i ägarnas intresse. En effekt av detta är att utformningen av bonusprogram till högsta ledningen i företagen har fått stort utrymme i media och ifrågasatts under en längre tid men dock blivit mer påtaglig i början av 2009. Kritiska röster har höjts om utformningen av bonusprogrammen och vilka prestationer det egentligen är som belönas.</p><p><strong>Syfte: </strong>Syftet med uppsatsen är att beskriva hur bonusprogrammen för verkställande direktörer i företag noterade på Stockholmsbörsen är utformade. Vi kommer även analysera om dessa program har skapat värde för aktieägarna i form av utdelning och aktievärde. Utifrån detta kommer vi lyfta fram de kriterier vi anser är viktigast för att skapa värde vid utformandet av bonusprogram för VD.</p><p><strong>Genomförande: </strong>För att uppfylla studiens syfte genomfördes undersökningen som en kvantitativ studie med hjälp av sekundärdata. Det empiriska materialet har sedan analyserat med hjälp av befintliga teorier inom styrning.</p><p><strong>Resultat:</strong> Största delen av företagen använder kombination av kortsiktiga och långsiktiga bonusprogram för att motivera, behålla och rekrytera en kompetent ledning. För att mäta prestationer används huvudsakligen redovisningsbaserade mått men även marknadsbaserade mått förekommer. Vår studie pekar på att det föreligger ett positivt samband mellan tilldelning av aktier, som belöning, och värdeskapande.</p> / <p><strong>Background:</strong> The conflicts between shareholders and managers interests have been a current topic for a long time and we are now in a new phase that are recognized by a clear emphasis that an organization have to be run in the shareholders interests. An effect of this is that the design of incentive programs for top management have gotten large space in media and has been questioned during a long time but has become more tangible in the beginning of 2009. Critical voices have been raised about the design of incentive programs and what types of performance actually are rewarded.</p><p><strong>Aim:</strong> The aim of this thesis is to describe how incentive programs for CEO in companies listed on Stockholm Stock Exchange are designed. We will also analyze if these programs has created value for shareholders in form of dividends and stock value. Based on this we will highlight what we consider are the most important criteria’s to create value when designing an incentive program for CEO.</p><p><strong>Implementation:</strong> To fulfill the thesis aim the survey was performed as a quantitative study based on secondary data. The empirical material has then been analyzed whit the help of existing theory’s within management.</p><p><strong>Result:</strong> Majority of the companies uses a combination between short-term and long-term incentive programs to motivate, preserve and recruit a competent management. To measure performance accounting based measures are mainly used but market based measures are also used. Our study indicates that there are a positive connection between handing out stocks, as a reward, and value creation.</p>

<p>Background: The issue about corporate governance became more prominent in recent years as a result of corporate scandals and misconduct of executives. Firms, board members, and executives have been subject to criminal and civil actions over hidden debt, inflated earnings, insider trading, tax evasion, misuse of funds, and breaches of fiduciary duties. Firms such as Enron, WorldCom, and Tyco became well-known because of huge failures in governance. In addition to the scandals, nowadays, we can see that the financial crises have brought attention for today’s debate of corporate governance issue as well.</p><p>Board is the major component of corporate governance like chief executive office (CEO), shareholders, stakeholders or community in general. This board is authorized to decide on the operations, management, and strategy of the company on behalf of the shareholders. Since the board members suppose to represent their interests.</p><p>Problem: What is the relationship between main board composition factors and firm’s accounting profitability?</p><p>Purpose: This thesis strives to analyze the level of correlation between selected board composition factors and accounting profitability of the Swedish Large Companies; by using appropriate statistical tools of correlation we aim to identify the association of selected variables.</p><p>Method: This research is conducted with sample of 63 large caps from the OMX Nordic Exchange-Stockholm and includes data from 2005 to 2009. We adopt the perspective of a shareholder and the philosophical stance of a positivist. The study uses quantitative method since our sample size is large enough to use the method.</p><p>Conclusion: The findings highlight that there is no significant relationship between some of the board composition factors namely- number of board directors, percentage of independent directors and experience of board member and the accounting profitability measure (Av. ROE) of Swedish large firms.</p><p>Where as, in case of the proportion of female directors, we do find a significant correlation between the accounting profitability measure (Av. ROE) and percentage of female directors of Swedish large firms. The correlation results show a positive relationship between the variables</p>

No description available.

No description available.

Background: The issue about corporate governance became more prominent in recent years as a result of corporate scandals and misconduct of executives. Firms, board members, and executives have been subject to criminal and civil actions over hidden debt, inflated earnings, insider trading, tax evasion, misuse of funds, and breaches of fiduciary duties. Firms such as Enron, WorldCom, and Tyco became well-known because of huge failures in governance. In addition to the scandals, nowadays, we can see that the financial crises have brought attention for today’s debate of corporate governance issue as well. Board is the major component of corporate governance like chief executive office (CEO), shareholders, stakeholders or community in general. This board is authorized to decide on the operations, management, and strategy of the company on behalf of the shareholders. Since the board members suppose to represent their interests. Problem: What is the relationship between main board composition factors and firm’s accounting profitability? Purpose: This thesis strives to analyze the level of correlation between selected board composition factors and accounting profitability of the Swedish Large Companies; by using appropriate statistical tools of correlation we aim to identify the association of selected variables. Method: This research is conducted with sample of 63 large caps from the OMX Nordic Exchange-Stockholm and includes data from 2005 to 2009. We adopt the perspective of a shareholder and the philosophical stance of a positivist. The study uses quantitative method since our sample size is large enough to use the method. Conclusion: The findings highlight that there is no significant relationship between some of the board composition factors namely- number of board directors, percentage of independent directors and experience of board member and the accounting profitability measure (Av. ROE) of Swedish large firms. Where as, in case of the proportion of female directors, we do find a significant correlation between the accounting profitability measure (Av. ROE) and percentage of female directors of Swedish large firms. The correlation results show a positive relationship between the variables

Bakgrund: Konflikterna mellan ägarnas och företagsledningens intressen har varit ett aktuellt ämne länge och vi befinner oss nu i en ny fas som kännetecknas av en tydlig betoning på att företaget i första hand måste drivas i ägarnas intresse. En effekt av detta är att utformningen av bonusprogram till högsta ledningen i företagen har fått stort utrymme i media och ifrågasatts under en längre tid men dock blivit mer påtaglig i början av 2009. Kritiska röster har höjts om utformningen av bonusprogrammen och vilka prestationer det egentligen är som belönas. Syfte: Syftet med uppsatsen är att beskriva hur bonusprogrammen för verkställande direktörer i företag noterade på Stockholmsbörsen är utformade. Vi kommer även analysera om dessa program har skapat värde för aktieägarna i form av utdelning och aktievärde. Utifrån detta kommer vi lyfta fram de kriterier vi anser är viktigast för att skapa värde vid utformandet av bonusprogram för VD. Genomförande: För att uppfylla studiens syfte genomfördes undersökningen som en kvantitativ studie med hjälp av sekundärdata. Det empiriska materialet har sedan analyserat med hjälp av befintliga teorier inom styrning. Resultat: Största delen av företagen använder kombination av kortsiktiga och långsiktiga bonusprogram för att motivera, behålla och rekrytera en kompetent ledning. För att mäta prestationer används huvudsakligen redovisningsbaserade mått men även marknadsbaserade mått förekommer. Vår studie pekar på att det föreligger ett positivt samband mellan tilldelning av aktier, som belöning, och värdeskapande. / Background: The conflicts between shareholders and managers interests have been a current topic for a long time and we are now in a new phase that are recognized by a clear emphasis that an organization have to be run in the shareholders interests. An effect of this is that the design of incentive programs for top management have gotten large space in media and has been questioned during a long time but has become more tangible in the beginning of 2009. Critical voices have been raised about the design of incentive programs and what types of performance actually are rewarded. Aim: The aim of this thesis is to describe how incentive programs for CEO in companies listed on Stockholm Stock Exchange are designed. We will also analyze if these programs has created value for shareholders in form of dividends and stock value. Based on this we will highlight what we consider are the most important criteria’s to create value when designing an incentive program for CEO. Implementation: To fulfill the thesis aim the survey was performed as a quantitative study based on secondary data. The empirical material has then been analyzed whit the help of existing theory’s within management. Result: Majority of the companies uses a combination between short-term and long-term incentive programs to motivate, preserve and recruit a competent management. To measure performance accounting based measures are mainly used but market based measures are also used. Our study indicates that there are a positive connection between handing out stocks, as a reward, and value creation.