The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications

16 Pages Posted: 7 Jan 2017  

Beni Lauterbach

Bar-Ilan University - Graduate School of Business Administration; European Corporate Governance Institute (ECGI)

Anete Pajuste

Stockholm School of Economics, Riga

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

Manuscript Type. Empirical.

Research Questions/Issues. Do media pressure and firm reputational concerns propel corporate governance improvements? Specifically, can they encourage unifications of dual class shares into a single “one share one vote” class?

Research Findings/Insights. Media criticism increases the likelihood of voluntary dual class share unifications. Firms more sensitive to public image are more likely to unify their dual class shares.

Theoretical/Academic Implications. Media plays an important role in corporate governance promotion. Firm reputation is a valuable asset, sensitive to public opinion and media criticism. Some real firm decisions can be influenced by firm image and reputation considerations.

Practitioner/Policy Implications. Firm image, reputation, and public relations activity are valuable. Media is a powerful and flexible tool that in some cases can substitute regulation in effectively restraining firms and their controlling shareholders.

Keywords: Corporate Governance, Dual Class Shares, Firm Reputation, Media Impact

Suggested Citation

Lauterbach, Beni and Pajuste, Anete, The Media and Firm Reputation Roles in Corporate Governance Improvements: Lessons from European Dual Class Share Unifications (January 2017). Corporate Governance: An International Review, Vol. 25, Issue 1, pp. 4-19, 2017. Available at SSRN: https://ssrn.com/abstract=2895172 or http://dx.doi.org/10.1111/corg.12153

Beni Lauterbach (Contact Author)

Bar-Ilan University - Graduate School of Business Administration ( email )

Ramat Gan
Israel

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Anete Pajuste

Stockholm School of Economics, Riga ( email )

Strelnieku iela 4a
Riga, LV 1010
Latvia

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