David Larcker and Brian Tayan on "The Art and Practice of Corporate Governance."

This podcast episode analyzes corporate governance matters, encompassing board effectiveness, boardroom practices, executive compensation, the dynamics of CEO operation, private company governance structures, firms responses to activism, and ESG concerns. The episode argues for conducive corporate governance systems that strike a balance between financial achievement and inclusive welfare. Takeaways • Proper board oversight can prevent cultural-driven tragedies like Boeing's priority for financial results over safety. • There is a global need for more transparency, legal protection, and participation of boards for better-informed decision-making and governance. • Mega-stock grants risk short-changing long term interest for immediate financial incentives and rewards, which can lead to reckless decision-making. • Private companies face unique governance challenges, but their opaque structures can foster risky behavior which may lead to disastrous outcomes. • The politicisation of ESG goals has overlooked operational costs, leaving older business leaders exposed to difficulties in compliance.