Curbing Managerial Manipulation: Board of Directors Monitoring and Advising Activities
Seminar Language: English
The board of directors simultaneously monitors, advises, and incentivizes the manager (Larcker & Tayan, 2016). First, monitoring is considered useful because it is expected to incentivize managers to pursue the shareholder’s interest and not their own personal myopic interests. High profile scandals, like Enron, WorldCom and Tyco, were responsible for forming the new corporate governance landscape. The most significant effect of the Sarbanes-Oxley Act of 2002 on the firm's corporate governance was the increased monitoring role through a higher presence of independent directors sitting on the board (Linck et al., 2008). Moreover, the recent Wirecard scandal gave rise to new changes in corporate governance regulation. Second, advising the management is also considered beneficial because it is expected to add value to the shareholders (Baldenius, Meng, & Qiu, 2019). Finally, the board’s task is to contract with the managers. These three board activities often interact and jointly influence managerial behavior. Can they curb managerial myopic behavior, or do they sometimes have counterproductive effects?
The seminar will examine how and when the board’s activities interact, and in which way this interaction influences managerial behavior. It will address the research and the practice perspective from an accounting standpoint. The seminar will analyze case studies from the practice, empirical evidence, and analytical research in corporate governance. The focus will be on the analytical models, their implications for empirical research and their implications for regulators.
- Friday, July 29 , 2022 (4 p.m.) - Application deadline
- Monday, August 1, 2022 (6 p.m.) - Information on acceptance (or non-acceptance).
- Monday, August 8, 2021 (6 p.m.) – Deadline for confirming/declining the seminar participation.
- Thursday, October 20, 2022 (10 a.m.) - Kick-off meeting (preliminary talk) and topic assignments.
- Thursday, December 8, 2022 (4 p.m.) – Deadline for handing in the discussion paper.
- Thursday, December 8, 2022 (4 p.m.) – Deadline for handing in the presentation.
- B.D. in the week December 12- December 16, 2022 - Presentations.
- Mandatory full attendance at all meetings (Kick-off meeting and all presentations). Mid-term talks are optional.
- Discussion paper – text (Introduction – Conclusion) approximately 15 pages long.
- Presentation, moderation and discussion (30 min + 25 min per team).
- Oral participation and discussion of other papers and presentations.
- Each topic will be analyzed by two students. The teams will be set and the topics will be assigned to each team at the kick-off meeting.
- An analytical research paper will be assigned to each topic.
- The main task of the discussion paper is to present the topic from both, research and practice, perspectives. You should explore the topic and the relevant literature in detail.
- The discussion paper should include:
- a focused practice perspective (including the regulation issues and the companies’ views),
- a research literature review (including empirical evidence and analytical research), and
- a critical explanation and analysis of the assigned research paper’s formal model. (The emphasis of the analysis is on moral hazard and adverse selection problems connected to the topic of conservatism in accounting.)
- Provisions for formal design: The rules regarding the form and citation already established in scientific literature should be used. If necessary, consult any of the books on academic writing.