CHAPTER 1
1. Adolf A. Berle, Jr., and Gardiner C. Means, The Modern Corporation and Private Property (New York: Macmillan, 1933).
2. The remainder of this chapter draws heavily on Fred R. Kaen, Allen Kaufman, and Larry Zacharias, ‘‘American Political Values and Agency Theory,’’ Journal of Business Ethics 7 (November 1988): 805–820.
3. Walter Lippman, Drift and Mastery: An Attempt to Diagnose the Current Unrest (New York: M. Kennerly, 1914).
4. See Louis D. Brandeis, The Curse of Bigness: Miscellaneous Papers ed. O. Fraenkel (New York: Viking Press, 1934) and T. Veblen, The Theory of the Business Enterprise (New York: Charles Scribner’s Sons, 1904).
5. John Kenneth Galbraith, The New Industrial State (Boston: Houghton Mifflin, 1967).
6. Adolf A. Berle, Jr., and Gardiner C. Means, The Modern Corporation and Private Property (New York: Harcourt, Brace, & World, 1968), p. 10.
7. Robin Marris, ‘‘Galbraith, Solow and the Truth About Corporation,’’ The Public Interest 9, 1968, pp. 37–46.
8. Robert H. Hayes and William J. Abernathy, ‘‘Managing Our Way to Decline,’’ Harvard Business Review, July–August 1980, pp. 67–77.
9. Michael C. Jensen and William Meckling, ‘‘Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure,’’ Journal of Financial Economics, October 1976, pp. 305–360.
CHAPTER 2
1. ‘‘How TIAA-CREF Works for Better Corporate Governance,’’ Participant, May 1999, pp. 10–11.
2. Colleen A. Dunlavy, ‘‘Corporate Governance in Late 19th Century Europe and the U.S.: The Case of Shareholder Voting Rights,’’ in Comparative Corporate Governance: The State of the Art and Emerging Research, ed. Klaus Hopt et al. (Oxford: Clarendon Press, 1998), pp. 5–39.
3. Alexandra Harney, ‘‘Restructuring Hands Culture Shock to Japanese Workers,’’ Financial Times, November 2, 1999, p. 4.
CHAPTER 3
1. Burton G. Malkiel, ‘‘Returns From Investing in Equity Mutual Funds 1971 to 1991,’’ Journal of Finance 50 (June 1995): 571.
2. The widely acknowledged expert on IPOs is Jay Ritter. See his ‘‘The Costs of Going Public,’’ Journal of Financial Economics 19 (1987): 269–282 and ‘‘The Long-Run Performance of Initial Public Offerings,’’ Journal of Finance 46 (1991): 3–27.
3. V. L. Bernard and J. K. Thomas, ‘‘Post-Earnings Announcement Drift: Delayed Price Response of Risk Premium?’’ Journal of Accounting Research 27 (Supplement 1989): 1–36.
4. David Bailey, ‘‘Coke, P&G May Rethink Terms of Venture,’’ Reuters, July 5, 2001.
5. Holman W. Jenkins, ‘‘The New Business Casual: Prison Stripes,’’ Wall Street Journal, March 13, 2002, p. A19.
CHAPTER 5
1. J. Randall Woolridge, ‘‘Competitive Decline: Is a Myopic Stock Market to Blame?’’ Journal of Applied Corporate Finance, (Spring 1988), v. 1: 26–36.
2. Su H. Chan, John Kensinger, and John D. Martin, ‘‘The Market Rewards Promising R&D—And Punishes the Rest,’’ Journal of Applied Corporate Finance 5 (Summer 1992): 59–66.
3. Quaker Oats Company, 1998 Annual Report.
CHAPTER 6
1. Betsey McKay and Joann S. Lubin, ‘‘Behind Coke’s Massive Cuts: An Impatient Board,’’ Wall Street Journal, January 27, 2000, p. B1.
2. Georgia-Pacific 2000 Annual Review, p. 41.
3. Matt Krantz, ‘‘Europe’s SAP Puts Its Stock in U.S. Hands,’’ Investor’s Business Daily, August 3, 1998.
4. ‘‘Bethlehem Steel Gets Waivers of New Worth Requirement,’’ Reuters, Yahoo Finance, July 3, 2001.
5. ‘‘Corporate Germany Reaping the Rewards of Risk-Taking,’’ Financial Times, August 11, 1998, p. 20.
6. For a summary, see Mitchell Berlin, ‘‘For Better or for Worse: Three Lending Relationships,’’ Business Review: Federal Reserve Bank of Philadelphia, November–December 1996, pp. 3–12.
7. Myron Slovin and John E. Young, ‘‘Bank Lending and Initial Public Offerings,’’ Journal of Banking and Finance, (1990), v. 14: 729–740.
8. Diana Preece and Donald J. Mullineaux, ‘‘Monitoring, Loan Renegotiability and Firm Value: The Role of Lending Syndicates,’’ Journal of Banking and Finance, (1996), v. 20: 577–594.
9. Ulrich Hartmann, from speech to the German-American Chamber of Commerce.
CHAPTER 7
1. Genuine Parts Corporation, 2000 Annual Report, p. 5.
2. Rafael La Porta, Florencil Lopez-De-Silanes, Andrei Shleifer, and Robert W. Vishny, ‘‘Agency Problems and Dividend Policies,’’ Journal of Finance 55 (February 2000): 1–34.
3. Georgia-Pacific 2000 Annual Report, p. 41,
4. Genuine Parts Company 2000 Annual Report, p. 4.
CHAPTER 8
1. An excellent survey of the theoretical and empirical literature on executive compensation is Kevin Murphy, Executive Compensation, working paper, Marshall School of Business, University of Southern California, April 1998.
2. George W. Fenn and Nellie Liang, ‘‘Corporate Payout Policy and Managerial Stock Incentives,’’ working paper 1999–23, Finance and Discussion Series, Board of Governors of the Federal Reserves System, 1999.
3. G. Bennett Stewart III, ‘‘EVA: Fact and Fantasy,’’ Journal of Applied Corporate Finance 7 (Summer 1994): 71–84.
4. ‘‘The Boss’s Pay,’’ Wall Street Journal, April 12, 2001, p. R11.
5. Joann S. Lublin, ‘‘CEOs Pay Last Year Was Lowest Since 1989,’’ Wall Street Journal, March 5, 2002, p. A6.
6. Carol Hymowitz, ‘‘Does Rank Have Too Much Privilege?’’ Wall Street Journal, February 26, 2002, p. B1.
CHAPTER 9
1. Steven Lipin, ‘‘When Managers Are the Buyers and the Sellers, Holders Beware,’’ Wall Street Journal, October 5, 2000, p. C1.
1. Michael E. Porter, ‘‘Capital Choices: Changing the Way America Invests in Industry,’’ Journal of Applied Corporate Finance 5, no. 2 (Summer 1992): 4–16.
2. Peter L. Bernstein, ‘‘Are Financial Markets the Problem or the Solution? A Reply to Michael Porter,’’ Journal of Applied Corporate Finance 5, no. 2 (Summer 1992): 17–22.
3. TIAA-CREF Policy Statement on Corporate Governance, TIAA-CREF, New York.
4. Melissa Hankins, ‘‘Battle Over the Boardroom,’’ Wall Street Journal, April 12, 2001, p. R6.
5. ‘‘Tyco Paid Director for Advisement on CIT Merger,’’ Monitor Daily, January 29, 2002, www.monitordaily.com/story_page.cfm?News_id.
6. Janet Elliott, ‘‘UT Dean’s Enron Ties Questioned,’’ Houston Chronicle, January 17, 2002, www.HoustonChronicle.com.
7. Ira M. Millstein and Paul W. MacAvoy, ‘‘The Active Board of Directors and Performance of the Large Publicly Traded Corporation,‘‘ Columbia Law Review 98 (June 1998).
CHAPTER 11
1. ‘‘Pull Up the Drawbridge,’’ Economist, July 7, 2001, p. 67.
2. William Boston and Paul Hofheinz, ‘‘Once Again, EU Takes a Back Seat to VW,’’ Wall Street Journal, February 27, 2002, p. A16.
3. ‘‘Repackaged Hoechst Will Let Market Decide,’’ Financial Times, November 7, 1996, p. 33.
4. Ulrich Hartmann, VEBA AG 1997 Shareholders’ Meeting. May 22, 1997.
5. Matt Krantz, ‘‘Europe’s SAP Puts Its Stock in U.S. Hands,’’ Investor’s Business Daily, August 3, 1998.