• Measure important traits and characteristics of top executives.
• Analyze how leadership characteristics influence behavior and corporate performance.
• Evaluate how different executive personalities interact with corporate governance mechanisms.
• Analyze how corporate governance mechanisms relevant in an international environment like law, ownership, boards and compensation mitigate governance problems.
• Identify traits and characteristics of top managers that influence the relationship between CSR and firm value.
• Critically evaluate how MNE can mitigate opposing stakeholder demands through CSR when being active on different international markets.

The decision-making of top executives at multinational enterprises is the focus of this course. Decisions at this level are associated with high complexity, uncertainty, and information asymmetry. Moreover, agency problems may plague the choices of MNEs' top executives. This course provides concepts from economic research, psychology, neurobiology and neuroscience to measure and predict the behavior and the leadership style of top executives in the international business context. For example, we will consider concepts related to risk aversion, overconfidence, and hubris, learn how to measure them and what behavioral consequences to expect when individual score high or low on these traits. Further, we will analyze the institutional environment that helps to make top executives internalize the interests of shareholders and stakeholders when taking important decisions. Specifically, we will consider corporate governance issue that are relevant for the international environment such as cross-border ownership, cross-listing, top executive compensation and the international market for CEOs. The main objective of this course is to equip stduents with a knowledge base such that they are able to participate in general decision-making concerning leadership and governance activities in a multinational corporation.

The format of the course is based on two elements:

Current academic literature: We will not use a textbook but a collection of academic papers that deal with specific issues of leadership and corporate governance, many of which have just been published in the recent years.

Student participation:You will actively participate in the class. In groups, you might be asked to present a paper, the solution to a case study and, if feasible, discuss a current example from the business press for which the paper is relevant.

Since this is a topic course, there does not exist one single course book covering the material in the course. Most of the required material is free to download when you are logged into the CBS network.. Some material may be uploaded in LEARN.

Bebchuk. L.A., A. Cohen, and A. Ferrell (2008): What Matters in Corporate Governance?, Review of Economic Studies, 22, 783-827.
Bebchuk, L., A. Cohen and H. Spamann (2009): The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008. Harvard Law School Working Paper.
Bebchuk, L. and J.M. Fried (2003): Executive Compensation as an Agency Problem, Journal of Economic Perspectives, 17, 71-92.
Bertrand, M. and S. Mullainathan (2003): Enjoying the quiet life? Managerial behavior following anti-takeover legislation, Journal of Political Economy, 111, 1043-1075.
Bizjak, J., M. Lemmon, and R. Whitby (2009): Option backdating and board interlocks, Review of Financial Studies, 22, 4821-4847.
Boone, A., Field, L., Karpoff, J. and C. Raheja (2007): The determinants of corporate board size and composition: An empirical analysis, Journal of Financial Economics, 85, 65-101.
Core, J., W. Guay and D. Larcker (2008): The power of the pen and executive compensation, Journal of Financial Economics, 88, 1-25.
Coates, J.M. et al. (2010), From molecule to market: steroid hormones and financial risk-taking. Philos. Trans. R. Soc. B. 365, 331–343.
Djankov, S., R. La Porta, F. Lopez-de-Silanes and A. Shleifer (2008):The Law and Economics of Self-Dealing,Journal of Financial Economics, 88, 430-465.
Dyck, A., N. Volchkova, and L. Zingales (2008): The Corporate Governance Role of the Media: Evidence from Russia, Journal of Finance,63, 1093-1135.
Fahlenbrach and Stulz (2009): Bank CEO Incentives and the Credit Crisis. (SSRN Paper)
Farber, D. (2004): Restoring Trust After Fraud: Does Corporate Governance Matter? (SSRN Working Paper)
Gibbons, R. and K.J. Murphy (1992): Optimal Incentive Contracts in the Presence of Career Concerns: Theory and Evidence, Journal of Political Economy,100, 468-505.
Gompers, P.A., J.L. Ishii, and A. Metrick (2003): Corporate Governance and Equity Prices, Quarterly Journal of Economics, 118, 107-155.
Hall, B.J. and K.J. Murphy (2003): The Trouble with Stock Options, Journal of Economic Perspective, 17, 49-70.
Hermalin, B. and M. Weisbach (2003), Boards of directors as an endogeneously determined institution: A survey of the economic literature, Federal Reserve Bank of New York Economic Policy Review, 9, 7-26.
Holmström, B. (1999): Managerialincentive problems: A dynamic perspective, Review of Economic Studies, 66, 169-182.
Jensen, M. and W. Meckling (1976): Theory of the firm: managerial behaviour, agency costs, and ownership structure, Journal of Financial Economics, 3, 305-360.
Karpoff, J. (2001): Public vs. private incentives in Arctic exploration: The effect of incentives and organizational structure, Journal of Political Economy, 109, 38-78.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer and R. Vishny (2000): Investor protection and corporate governance,Journal of Financial Economics, 58, 3-27.
La Porta, R., F. Lopez-de-Silanes, and A. Shleifer (1999): Corporate ownership around the world, Journal of Finance, 54, 471-517.
Larcker, D. and B. Tayan (2007): Executive Compensation at Nabors Industries: Too Much, Too Little, or Just Right? (SSRN Paper)
Levi, Maurice, Kai Li, and Feng Zhang. 2010. “Deal or No Deal: Hormones and the M&A Game.” Management Science, 56(9): 1462–82.
Lewellen, Katharina. "Financing decisions when managers are risk averse."Journal of Financial Economics, 82.3 (2006): 551-589.
Meulbroek, L. (1992): An empirical study of illegal insider trading, Journal of Finance, 47, 1661-1699.
Nenova, T. (2003): The value of corporate voting rights and control: A cross-country analysis, Journal of Financial Economics, 68, 325-351.
Noe, T. (1997): Insider Trading and the Problem of Corporate Agency, Journal of Law, Economics, & Organization,13,. 287-318.
Roulstone, D. (2003): The relation between insider trading restrictions and executive compensation, Journal of Accounting Research, 41, 525-551.
Sapienza, P., L. Zingales, and D. Maestripieri (2009): Gender differences in financial risk aversion and career choices are affected by testosterone. Proceedings of National Academy of Sciences USA, 106(36), 15268–15273.
Shleifer, A. and R. Vishny (1997): A survey of Corporate Governance, Journal of Finance, 52, 737-783.
Tirole, J. (2001): Corporate Governance, Econometrica, 69, 1-35.