More from Stanford GSB Corporate Governance Research: stanford.io/2abm494

1. KEY CORPORATE GOVERNANCE INSIGHTS
STANFORD CLOSER LOOK SERIES
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2. CEOS MAKE THE BEST DIRECTORS, RIGHT?

3. CEOs are criticized for being unable to serve on time-consuming committees,
unable to participate in meetings on short notice, and for being too bossy, poor
collaborators, and not good listeners.
SEVENMYTHSOFBOARDSOFDIRECTORS
STANFORD CLOSER LOOK SERIES
DAVID F. LARCKER, BRIAN TAYAN | OCTOBER 2015
CEOS MAKE THE BEST DIRECTORS, RIGHT?

4. HOW IMPORTANT IS A “TRUST-BASED” SYSTEM
TO BERKSHIRE HATHAWAY’S RESULTS?

5. Subsidiary CEOs agree that their financial performance is better than it would be if their
company were owned by a company other than Berkshire Hathaway and also better than
if it were a standalone company.
TRUSTANDCONSEQUENCES:ASURVEYOFBERKSHIREHATHAWAYOPERATINGMANAGERS
STANFORD CLOSER LOOK SERIES
DAVID F. LARCKER, BRIAN TAYAN | OCTOBER 2015
HOW IMPORTANT IS A “TRUST-BASED” SYSTEM
TO BERKSHIRE HATHAWAY’S RESULTS?

6. PRO FORMA COMPENSATION:
USEFUL INSIGHT OR WINDOW
DRESSING?

7. Companies have begun to disclose alternative measures of CEO
compensation that differ—sometimes substantially—from those
reported in the summary compensation table of the annual proxy.
PRO FORMA COMPENSATION:
USEFUL INSIGHT OR WINDOW
DRESSING?
PROFORMACOMPENSATION:USEFULINSIGHTORWINDOWDRESSING?
STANFORD CLOSER LOOK SERIES
DAVID F. LARCKER, BRIAN TAYAN, YOUFEI XIAO | JULY 2015

8. HOW IMPORTANT IS CULTURE?

9. HOWIMPORTANTISCULTURE?ANINSIDELOOKATKELLERWILLIAMSREALTY
STANFORD CLOSER LOOK SERIES
DAVID F. LARCKER, BRIAN TAYAN | APRIL 2015
According to Keller Williams Realty, very.
The company’s economic model would not succeed without
its culture and ... its culture could not exist without its
economic systems.
HOW IMPORTANT IS CULTURE?

10. WHAT CAN A FOR-PROFIT BOARD POSSIBLY
LEARN FROM A NONPROFIT?

11. A lot.
Nonprofit boards are characterized by more power sharing than for-profit boards. Only 3 percent of
nonprofits have a dual chair/CEO. Independent directorships are associated with better monitoring,
and powerful CEOs are sometimes associated with lower governance quality.
WHATCANFOR-PROFITANDNONPROFITBOARDSLEARNFROMEACHOTHERABOUTIMPROVINGGOVERNANCE?
STANFORD CLOSER LOOK SERIES
NICHOLAS E. DONATIELLO, DAVID F. LARCKER, BRIAN TAYAN | APRIL 2015
WHAT CAN A FOR-PROFIT BOARD POSSIBLY
LEARN FROM A NONPROFIT?

12. WHAT IS INVESTORS’ BIGGEST
COMPLAINT ABOUT PROXY
STATEMENTS?

13. WHAT IS INVESTORS’ BIGGEST
COMPLAINT ABOUT PROXY
STATEMENTS?
The largest complaint involves executive compensation
and the inability of investors to read the information that
companies disclose, and to determine whether senior
management is paid appropriately.
THE IDEAL PROXY STATEMENT
STANFORD CLOSER LOOK SERIES
DAVID F. LARCKER, BRIAN TAYAN | FEBRUARY 2015

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