I am an adjunct professor at NYU-Stern as well as a visiting lecturer at the University of St. Gallen in Switzerland. In both cases I teach or lecture on corporate governance. In 2020, I was selected as a Directorship 100 Honoree by the National Association of Corporate Directors.
My day job is as an advisor to investors and boards on the measurement and compensation issues of corporate governance. I basically work with clients on helping them overcome agency costs.
My Approach to Ethical Systems:
The basic problems of corporate governance generally fall under the categories of theft, waste, and shirking.
Unlike theft, which is categorically bad behavior, waste or shirking rise to the level of ethical problems only as a matter of degree. Nobody spends other people’s money as carefully as they would spend their own; hardly anyone will be quite as diligent on another’s behalf as they would on their own. In the corporate world, waste and shirking (called “agency costs” in academia) are far more prevalent and damaging than outright theft.
I study and work with the several mechanisms that have evolved to contain these agency costs:
- The first is direct oversight of management by a board of directors. (If that board does not consist of principals, the behavior of directors can pose their own agency issues.)
- The second mechanism is transparency. When principals are able to gain a greater visibility to the results–if not the actions–of their agents, the agents tend to behave more prudently and diligently.
- The third mechanism is formal incentives. If agents get a piece of the action, principals will see more action. Perverse incentives will always overcome good intentions.
My Ethical Systems Research Page: Corporate Governance