As a result of the Supreme Court’s broad definition for ‘best interests of the corporation’ in recent decisions, the author examines to whom managers ought to owe their fiduciary duties normatively and what role managerial discretion has in this debate. The author argues that the lack of clarity offered by the judiciary, in this area of corporate law, has led to the adoption of a wide discretion being afforded to managers. An examination of several rationales fails to justify this continued adoption of a broad discretion. The author argues that granting managers with wide discretionary powers is problematic because the interests of constituencies will not be adequately protected. At the very least, statutory reform is necessary to protect the most vulnerable stakeholders. The author recommends that the law be amended to require that managers, in performing their fiduciary duties, regard the interests of employees and shareholders.

As a result of the Supreme Court’s broad definition for ‘best interests of the corporation’ in recent decisions, the author examines to whom managers ought to owe their fiduciary duties normatively and what role managerial discretion has in this debate. The author argues that the lack of clarity offered by the judiciary, in this area of corporate law, has led to the adoption of a wide discretion being afforded to managers. An examination of several rationales fails to justify this continued adoption of a broad discretion. The author argues that granting managers with wide discretionary powers is problematic because the interests of constituencies will not be adequately protected. At the very least, statutory reform is necessary to protect the most vulnerable stakeholders. The author recommends that the law be amended to require that managers, in performing their fiduciary duties, regard the interests of employees and shareholders.

Baselregelverket är en samling råd och riktlinjer som har som mål att skapa finansiell stabilitet för banker världen över. Det finns i tre omfattningar och efter finanskrisen år 2008 påbörjades ett betydande reformarbete av Basel II efter att banker inte fångade upp riskerna i tillräckligt stor utsträckning. Med ökade kapitalkrav och en förbättrad riskhantering hos bankerna har Baselkommittén som mål att de tidigare bristerna med regelverket inte ska upprepas. Detta har medfört stora interna organisatoriska förändringar för bankerna. Syftet med den här uppsatsen är att undersöka hur finanskrisen år 2008 och reformarbetet av Baselregelverket påverkat chefers handlingsutrymme på svenska banker, där begreppet handlingsutrymme utgår från managerial discretion som handlar om chefers handlingsfrihet under påverkan av externa faktorer. Studien kommer därmed att bidra med en ökad förståelse för regelverket och lyfta fram personliga uppfattningar om hur regelverket har påverkat cheferna.   Kandidatuppsatsen är baserad på en kvalitativ forskningsmetod där vi utförde semi-strukturerade intervjuer med åtta respondenter med chefserfarenhet från svenska banker. Empirin som vi har fått fram tyder på att cheferna upplever ett minskat handlingsutrymme som en påföljd av mer komplexa regelverk. Det har blivit mer komplicerat för cheferna i dag jämfört med innan krisen att styra bankernas dagliga verksamhet på grund av ökade krav på regelefterlevnad och noggrannare uppföljning av riskmätning och kapitalkrav. Vi har även kommit fram till att cheferna upplever förändringar i sitt handlingsutrymme beroende på faktorer som exempelvis bankens storlek och deras införande av olika internmetoder. / The Basel Accords are a collection of advice and recommendations that strives to establish a financial stability of banks all over the world. The accord exists in three versions and after the financial crisis 2008 a considerable reform was established of Basel II due to the fact that previous versions did not accurately handled risks well enough. With the increasing capital requirements and improved risk management at banks, the Basel Committee on Banking Supervision wants to ensure that the previous flaws with the accord will not be repeated. This has resulted in big organizational changes for the banks. The purpose of this paper is to investigate how the financial crisis 2008 and the reform of the Basel Accord that followed have affected the latitude of managerial action of the managers in swedish banks, which is based on managerial discretion that mean changes in managerial roles under influence of external factors. The study will thereby contribute with an increased understanding for this accord and point out personal perceptions of how the regulation have affected the managers.   This bachelor thesis is based on a qualitative research where we performed eight semi-structured interviews with respondents having managerial experiences from swedish banks. The empirical data we have obtained shows that managers perceive a reduced latitude of managerial action as a consequence of more complex regulations. It’s more complicated for managers today considering how it was before the crisis to control the daily operations of the bank because of the increased demand for compliance and a stricter monitoring of risk measurement and capital requirements. We have also concluded that managers are experiencing different changes in the latitude of managerial actions depending on factors such as the bank’s size and how they introduce the various internal methods

This dissertation addresses the question of effective delegation, exploring it through the concept of managerial discretion (i.e., a latitude of managerial actions, which lie in the zone of shareholders’ acceptance). While the corporate governance perspective on managerial discretion focuses mainly on the costs associated with delegation, the strategic management perspective emphasizes its benefits in creating value for the firm. Building on research in corporate governance and strategic management, this dissertation develops and empirically tests a theoretical framework that explains how the two distinct dimensions of managerial discretion jointly influence organizational outcomes. The proposed framework illuminates the importance of balance between the restraining and enabling decisions undertaken by professional managers. This dissertation makes a two-fold contribution to the field of corporate governance. First, it identifies and explains organizational and environmental forces that jointly shape strategic and governance dimensions of managerial discretion, redefining the concept. Second, it conceptually and empirically explores an integrative model of managerial discretion within the broader corporate governance framework, providing evidence of the joint effects of governance and strategic dimensions of discretion on organizational outcomes. The results suggest that the effect of governance dimension of managerial discretion on a firm’s performance is contingent on the strategic dimension of discretion. This draws attention to potential strategic implications of board monitoring over managerial decision making. While the majority of studies emphasize the benefits of increased control over managerial decision making, particularly stressing board monitoring, this dissertation also considers the benefits of delegation for firms’ strategic development. By reversing the polarity of the current emphasis on disciplining managers, this dissertation provides a more balanced view of the notion of corporate governance. The value of this approach derives from the integrated model, which highlights the benefits and the costs of delegation.

The purpose of this dissertation is to analyze how managerial discretion is influenced by the environment and, thereby, increase the theoretical knowledge of the concept. Hambrick and Finkelstein (1987) introduced environment as a level affecting managerial discretion. However, the authors only discussed it in an industry context. Moreover, in this dissertation we developed the environmental level by adding two more contexts. Thereby, a theoretical input –and output model were created. These include three environmental sublevels: Industry characteristics, public sector and transition economy. The analysis is under a strategic perspective, which defines top managers’ discretion as the latitude of strategic actions. Hence, managerial discretion varies in the scope of available actions influenced by environmental factors. To fulfill the purpose of this dissertation, the methodical approach is a case-study. Thus, the data consists of interviews, observations and public documents collected in a governmental organization. The findings have shown that a dynamic environment, such as a country undergoing a transition, provides context-specific factors affecting the degree of managerial discretion. Context-specific factors, such as powerful outside forces and quasi-legal constraints can increase and/or decrease the degree of top managers’ degree of discretion. The conclusion summarizesthe findings of how the different factors within each sublevel, affect the degree of managerial discretion. Moreover, the conclusion also contains the contributions of this dissertation. Firstly, the study contributes to the theory of managerial discretion, by introducing context specific factors within the public sector and a transition economy. Secondly, the study enhances the empirical knowledge about the concept, by providing new empirical evidence of managerial discretion. Finally, the results of this dissertation can help policy makers as guidelines when implementing policies. Recommendations for future research include adding the governance perspective, and/or conducting a comparison research with different organizations/contexts.

One of the most conspicuous features of mergers is that they come in waves that are correlated with increases in share prices and price/earnings ratios. We use a natural way to discriminate between pure stock market influences on firm decisions and other influences by examining merger patterns for both listed and unlisted firms. If "real" changes in the economy drive merger waves, as some neoclassical theories of mergers predict, both listed and unlisted firms should experience waves. We find significant differences between listed and unlisted firms as predicted by behavioral theories of merger waves. (author's abstract)

This dissertation is a series of study on CEO turnover, succession, and compensation, which consists of three essays. In essay 1, I investigate how the Sarbanes-Oxley Act (SOX) affects CEO tenure and the characteristics of CEO turnover. I do not find a significant relation between financial reporting and CEO turnover even though SOX enforces accurate financial reporting and personal responsibilities. However, I find SOX affects CEO turnover via the changes to corporate boards. I provide some evidence supporting the idea that intensified monitoring significantly reduces CEO tenure. Specifically, I find SOX significantly affects the relation between CEO tenure and the independence of the board. I find that the likelihood of forced CEO turnover is higher in the post-SOX period. I also document that intensified monitoring increases the likelihood of forced turnover, specifically, I find CEO power concentration, institutional ownership, negative news, and shareholder governance proposals significantly affect the odds of forced turnover. I also provide some evidence supporting the hypothesis that firm performance is inversely related to forced CEO turnover. I document that the average number of audit committee meetings significantly increased in the post-SOX period, and the interaction between the number of audit committee meetings and firm performance significantly increase the likelihood of forced CEO turnover. Overall, the results support the notion that SOX affects boards' decisions on CEO turnover. I do not find that the proportion of outside directors significantly affects the odds ratio of forced turnover, indicating outside dominated boards may not be effective in removing CEOs. Managerial discretion defines the working environment of a manager and could potentially affect a board's choice of a successor CEO. In essay 2, I hypothesize that boards tend to appoint younger (older) CEOs in firms with high (low) managerial discretion. I further propose that the relation between managerial discretion and successor CEO age may be moderated by the age of board members, the origin of the successor, and the successor's designated heir status. Using a sample of 629 successions occurring between 1994 and 2005, I find empirical evidence that supports my first hypothesis for the total sample and the sample of successions with voluntary turnover. Board age, successor origin, and the successor's designated heir status do not moderate the results for the total sample. However, I find that board member age and designated heir status moderate the relation between managerial discretion and CEO age following forced turnover. Following voluntary turnover, successor origin and designated heir status moderate the result. The above mentioned three board and CEO characteristics may either strengthen or weaken the link between managerial discretion and CEO age depending on how the incumbent CEO leaves the CEO position. In addition, several other factors also statistically affect boards' decisions regarding CEO age, including governance, CEO board tenure, and titles held by the successor. In essay 3, I examine the role of managerial discretion in setting CEO pay at succession. Using a sample of 656 successions from 1994-2005, I provide evidence that a successor CEO's pay level is positively and significantly associated with the level of managerial discretion. However, outside succession moderates the link between managerial discretion and pay level. I further find that the moderating effect of a successor's origin is contingent upon the bargaining power of the board of directors for the total and forced turnover samples. As for the pay structure of a successor, the results of the total sample and forced turnover subsample provide evidence that managerial discretion positively relates to the proportion of risk-based pay and outside succession has a moderating effect on this relation; and the moderating effect depends on the board bargaining power. As for the voluntary turnover sample, the pay structure of the new CEO is mainly determined by the pay structure of the predecessor, firm performance, and the board bargaining power. This study enriches existing research on managerial discretion and succession by linking CEO bargaining power at succession with the theory of managerial discretion.

A importância e papel do executivo de marketing são temas em evidência entre os acadêmicos dessa área. Embora os administradores sejam essenciais para as organizações, há certa dúvida quanto a atual relevância do diretor de marketing em relação a outros cargos de nível estratégico. Nesse contexto, esta dissertação busca averiguar qual o impacto da substituição de altos executivos de marketing em empresas listadas na BOVESPA. Realizouse um estudo de evento, contendo trinta empresas, para identificar o impacto dessa mudança na administração das companhias. Posteriormente, comparou-se o retorno identificado aos fatores da liberdade administrava, pois, de acordo com esse conceito, a importância dos dirigentes depende de alguns aspectos que acabam por limitar ou ampliar as suas opções de ação. Assim, características da empresa e do próprio profissional foram, por meio de uma análise de regressão múltipla, comparadas com o impacto financeiro da substituição do executivo. Os resultados sugerem que há uma relação entre o retorno anormal e as características do evento, tal como o diretor já ter trabalhado em outra ocasião na empresa que o contratou. / The importance and role of the marketing executive is a highlighted subject between the academics of this area. There is no consensus about the current relevance of the chief marketing officer in relation to other functions in the top board of company’s executives. This research seeks to access what impact the change of the chief marketing officer has in the value of companies listed in BOVESPA. An event study has been realized, with thirty firms, to identify the impact of this change in the board of Brazilian companies. After that, the observed return was compared to aspects of managerial discretion, this concept defends that the executive’s importance is a function of some characteristics that limit or amplify its options of action. Therefore, these aspects were compared with the abnormal return trough a regression analysis. The results suggest the existence of a relationship between individual characteristics, such as the executive being an insider, and firm-specific characteristics, such as the size of the company, and the abnormal return of the event.

A importância e papel do executivo de marketing são temas em evidência entre os acadêmicos dessa área. Embora os administradores sejam essenciais para as organizações, há certa dúvida quanto a atual relevância do diretor de marketing em relação a outros cargos de nível estratégico. Nesse contexto, esta dissertação busca averiguar qual o impacto da substituição de altos executivos de marketing em empresas listadas na BOVESPA. Realizouse um estudo de evento, contendo trinta empresas, para identificar o impacto dessa mudança na administração das companhias. Posteriormente, comparou-se o retorno identificado aos fatores da liberdade administrava, pois, de acordo com esse conceito, a importância dos dirigentes depende de alguns aspectos que acabam por limitar ou ampliar as suas opções de ação. Assim, características da empresa e do próprio profissional foram, por meio de uma análise de regressão múltipla, comparadas com o impacto financeiro da substituição do executivo. Os resultados sugerem que há uma relação entre o retorno anormal e as características do evento, tal como o diretor já ter trabalhado em outra ocasião na empresa que o contratou. / The importance and role of the marketing executive is a highlighted subject between the academics of this area. There is no consensus about the current relevance of the chief marketing officer in relation to other functions in the top board of company’s executives. This research seeks to access what impact the change of the chief marketing officer has in the value of companies listed in BOVESPA. An event study has been realized, with thirty firms, to identify the impact of this change in the board of Brazilian companies. After that, the observed return was compared to aspects of managerial discretion, this concept defends that the executive’s importance is a function of some characteristics that limit or amplify its options of action. Therefore, these aspects were compared with the abnormal return trough a regression analysis. The results suggest the existence of a relationship between individual characteristics, such as the executive being an insider, and firm-specific characteristics, such as the size of the company, and the abnormal return of the event.

A importância e papel do executivo de marketing são temas em evidência entre os acadêmicos dessa área. Embora os administradores sejam essenciais para as organizações, há certa dúvida quanto a atual relevância do diretor de marketing em relação a outros cargos de nível estratégico. Nesse contexto, esta dissertação busca averiguar qual o impacto da substituição de altos executivos de marketing em empresas listadas na BOVESPA. Realizouse um estudo de evento, contendo trinta empresas, para identificar o impacto dessa mudança na administração das companhias. Posteriormente, comparou-se o retorno identificado aos fatores da liberdade administrava, pois, de acordo com esse conceito, a importância dos dirigentes depende de alguns aspectos que acabam por limitar ou ampliar as suas opções de ação. Assim, características da empresa e do próprio profissional foram, por meio de uma análise de regressão múltipla, comparadas com o impacto financeiro da substituição do executivo. Os resultados sugerem que há uma relação entre o retorno anormal e as características do evento, tal como o diretor já ter trabalhado em outra ocasião na empresa que o contratou. / The importance and role of the marketing executive is a highlighted subject between the academics of this area. There is no consensus about the current relevance of the chief marketing officer in relation to other functions in the top board of company’s executives. This research seeks to access what impact the change of the chief marketing officer has in the value of companies listed in BOVESPA. An event study has been realized, with thirty firms, to identify the impact of this change in the board of Brazilian companies. After that, the observed return was compared to aspects of managerial discretion, this concept defends that the executive’s importance is a function of some characteristics that limit or amplify its options of action. Therefore, these aspects were compared with the abnormal return trough a regression analysis. The results suggest the existence of a relationship between individual characteristics, such as the executive being an insider, and firm-specific characteristics, such as the size of the company, and the abnormal return of the event.