Corporate Governance

Hadani, M., “The CEO as chief political officer: Managerial discretion and corporate political activity,” Journal of Business Research, 2015.

Corporate political activity (CPA) is an important nonmarket strategy aimed at advancing a firm's interests by influencing public policy. Yet studies report mixed results as to the impact of CPA on firm outcomes. Building on recent extant research we suggest that one reason for the ambivalent evidence regarding the impact of CPA on firm performance is the moderating role of CEO discretion on the CPA-firm performance relationship. In a longitudinal study of S&P 1000 firms over 10 years, we test competing perspectives regarding the moderating impact of CEO discretion on the CPA-corporate performance relationship. We find that some aspects of CEO discretion, in particular CEO duality, moderate the relationship between CPA and performance. The findings provide some support for an agency view of the impact of CEO discretion the CPA-performance relationships, which carry implications for both scholarship and regulation in the areas of CPA and corporate governance.

Hawley, J., “The basics and basis of responsible investment” and “Reclaiming pension fund fiduciary duty,” The Routledge Handbook of Responsible Investment, 2015.

The UN-supported Principles for Responsible Investment initiative has led to around a third of the world’s financial assets being managed with a commitment to invest in a way that considers environmental, social or governance (ESG) criteria. The responsible investment trend has increased dramatically since the global financial crisis, yet understanding of this field remains at an early stage. This handbook provides an atlas of current practice in the field of responsible investment. With a large global team of expert contributors, the book explores the impact of responsible investment on key financial actors ranging from mainstream asset managers to religious organizations.

A Plus MagazineWallace, T. and Ng. A. (2015), “Self-financing degree providers as non-profit organizations,” A Plus Magazine, Hong Kong Institute of Certified Public Accountant, 11(5).

This article discusses the "self-financing" insights of nonprofit degree-offering institutions from financial reporting and accounting perspectives.  In Hong Kong, distinct standards in financial reporting for non-profit organizations have not been fully developed.  This research explores the role of governance and financial management in the non-profit organizations and argues that criticisms against the size of reserves accumulated are largely based on unsubstantiated observations.

Cambridge Handbook of Institutional Investment and Fiduciary Duty

Hawley, James P., Hoepner, Andreas G. F., Johnson, Keith L., Sandberg, Joakim, and Waitzer, Edward J. June 2014, "Cambridge Handbook of Institutional Investment and Fiduciary Duty," Cambridge University Press.

The Cambridge Handbook of Institutional Investment and Fiduciary Duty is a comprehensive reference work exploring recent changes and future trends in the principles that govern institutional investors and fiduciaries. A wide range of contributors offer new perspectives on dynamics that drive the current emphasis on short-term investment returns. Moreover, they analyze the forces at work in markets around the world which are bringing into sharper focus the systemic effects that investment practices have on the long-term stability of the economy and the interests of beneficiaries in financial, social and environmental sustainability. This volume provides a global and multi-faceted commentary on the evolving standards governing institutional investment, offering guidance for students, researchers and policy-makers interested in finance, governance and other aspects of the contemporary investment world. It also provides investment, business, financial media and legal professionals with the tools they need to better understand and respond to new financial market challenges of the twenty-first century. 

strategic management journal

Hadani, M. & Schuler, D.A. 2013, "In search of El Dorado: The elusive financial returns on corporate political investments," Strategic Management Journal, vol. 34, no. 2, pp. 165.

Although many believe that companies' political activities improve their bottom line, empirical studies have not consistently borne this out. We investigate the relationship between corporate political activity (CPA) and financial returns on a set of 943 S&P 1500 firms between 1998 to 2008. We find that firms' political investments are negatively associated with market performance and cumulative political investments worsen both market and accounting performance. Firms placing former public officials on their boards experienced inferior market performance and similar accounting performance than firms without such board members. We find, however, that CPA is positively associated with market performance for firms in regulated industries. Our results challenge the profit-maximizing assumptions underlying CPA research and focus on agency theory to better understand CPA.

sustainable finance and investment

Hawley, J. & Beyhaghi, M. 2014, "Modern Portfolio Theory and Risk Management: Assumptions and Unintended Consequences," Journal of Sustainable Finance and Investment.

This article is a somewhat technical review (although only minimally quantitative) of both the origins of modern portfolio theory (MPT) and some of the consequences of its widespread adoption, which have had, we argue, the effect of undermining its original insights as well as well as its successes. Unlike many proponents of MPT (in various forms) as well as some critics of it, we argue that the widespread adoption of MPT as the basis for much of contemporary finance has contributed, although unwittingly, to financial instability in general, and to the 2008 financial crisis specifically.


Moral Courage in Organizations: Doing the Right Thing at Work

White, J., 2010, "NGO Leaders on the Edge: The Moral Courage to Fight for Human Rights,"  in Cormer, DR & Vega, G (eds) Moral Courage in Organizations: Doing the Right Thing at Work, M.E. Sharpe Publishers, Armonk, New York.  





Hawley, J. 2012, "Recent developments in U.S. Corporate Governance, Dodd-Frank and After," Revue D'Economie Financiere.

The article (in French) argues that although the Dodd-Frank financial reforms in the U.S. supposedly eliminated the too big to fail problem, it in fact specified a variety of means whereby the federal government can in fact ‘bail out’ systemically important financial firms. While eliminating easy ways to bail out large banks and financial institutions, a number of far less easy ways were created, all of which involve a number of federal institutions cooperating, e.g. the Federal Reserve, U.S. Treasury, the President.


Hawley, J., Johnson, K. & Waitzer, E. 2011, "Reclaiming Fiduciary Duty Balance," Rotman International Journal of Pension Management, vol. 4, no. 2.

We argue in this piece that the legal duty of fiduciary duty in common law countries is at an inflection point: in some jurisdictions already expanding to confront the new challenges and opportunities that large (and smaller) institutional fiduciary investors (e.g. saving and mutual funds) confront. Among these challenges are inter-generational, long-term risks/opportunities such as climate change, resource scarcities (e.g. water in some regions) that investors must confront (and in some case are currently confronting). The article briefly traces the changes in the understanding of fiduciary duty over centuries, suggesting that contrary to some understandings all too current, such duties are not written in stone and unchanging.

towards a new paradigm

Hawley, J. 2011, "Towards a Fiduciary Capitalism Perspective on Business Ethics," in Louche, C, Perez, R & Sun, W (eds); Finance and Sustainability, Emerald Group Publishing Limited, Bingley, UK.

This chapter looks at how a fiduciary capitalism perspective both overlaps and differs from more traditional ‘ethical’ conceptions of business ethics. It suggests with the growth of large fiduciary institutional investors (increasingly a global phenomenon) the previous distinction between stock owners and stakeholders is significantly less meaningful. This is because fiduciary investors increasingly represent a very large (and in some countries like the U.S., the U.K. and Canada) a substantial majority of citizens. Thus, while often citizens wear two hats, in many cases their interests as stakeholders and long-term stock owners (albeit mostly indirectly via the institutions) overlaps. It thus forces us to reconsider significant beliefs that have dominated traditional business ethics.


Hawley, J., Kamath, S. & Williams A.T. 2009, "Sovereign Wealth and Pension Funds: Conceptualizing Implications for 'responsible investment',"  Revue D'Economie Financiere.

The article reviews the then rapid growth of sovereign wealth funds (funds owned and run by central governments, based typically on oil wealth (e.g. Norway, Kuwait) or on large export surpluses (China). It then ranks these funds based on how democratic their governments are (or are not); on how transparent the funds are (both in terms of their investment assets and their governance); and finally suggests that along these two dimensions, some funds are more likely to be invested in sustainable/responsible investment assets and/or to be involved in active corporate governance. Norway stands out as exemplary, while others (e.g. Kuwait) are entirely opaque so that no one can know what they own, in what they invest and whether or not they take part in active ownership (corporate governance), and how any of this might be ‘responsible.’

climate change

Hawley, J, Dickenson, P & Williams A.T. 2009 "Corporate Initiatives on Climate Change," in Rosencrantz, A & Schneider, S (eds)  Climate Change Science and Policy, Island Press, Washington, D.C.

This chapter reviews both what the authors consider then significant corporate level climate change programs, as well as briefly reviews what institutional owners of those (and other) corporations urged, using corporate governance means, those firms to undertake regarding climate change issues.