More from these Authors

• Article | Harvard Business Review (website) | October 14, 2019

  A Guide to the Big Ideas and Debates in Corporate Governance

  Lynn S. Paine and Suraj Srinivasan

  How corporations govern themselves has become a matter of broad public interest in recent decades. Amid this many commentators and experts still disagree on such basic matters as the purpose of the corporation, the role of corporate boards of directors, the rights of shareholders, and the proper way to measure corporate performance. The issue of how shareholder interests should be considered in corporate decision making is particularly contentious. This article is a resource for understanding today’s key debates around governance and identifying the main areas in which changes are being called for. Many readers are grappling with these questions now or may have to address in the near future; in any case, the debates are sure to affect how business operates across the globe.

  Keywords: Corporate Governance; Mission and Purpose; Governing and Advisory Boards; Business and Shareholder Relations; Performance; Measurement and Metrics;

  Citation:

  Paine, Lynn S., and Suraj Srinivasan. "A Guide to the Big Ideas and Debates in Corporate Governance." Harvard Business Review (website) (October 14, 2019).  View Details

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• Case | HBS Case Collection | October 2019

  A Conversation with Ellen J. Kullman, Chairman & CEO of DuPont, 2009-2015

  Lynn S. Paine and Will Hurwitz

  Ellen J. Kullman, the retired Chairman and CEO of DuPont, describes how she guided the storied science and technology company through a contentious proxy battle with activist investor Trian Partners, which acquired DuPont shares in 2013 and sought to break up the company. Trian’s pursuit of board seats led to a 2015 shareholder vote, which DuPont won under Kullman’s leadership. In a sweeping interview with Professor Lynn S. Paine, Kullman describes lessons from her experiences navigating the proxy contest that captured national attention as well as about working with your board, setting company strategy, leading a large corporation, evaluating time frames for shareholder returns, measuring stakeholder performance, assessing shareholder engagement, considering joining a new board and boardroom dynamics, and understanding how boards have changed over the years.

  Keywords: Agribusiness; Capital Structure; Corporate Accountability; Corporate Governance; Institutional Investing; Leadership; Leadership Style; Management; Transformation; Agriculture and Agribusiness Industry; Chemical Industry; United States;

  Citation:

  Paine, Lynn S., and Will Hurwitz. "A Conversation with Ellen J. Kullman, Chairman & CEO of DuPont, 2009-2015." Harvard Business School Case 320-017, October 2019.  View Details

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• Working Paper | HBS Working Paper Series | 2019

  Core Earnings: New Data and Evidence

  Ethan Rouen, Eric C. So and Charles C.Y. Wang

  Using a novel dataset that comprehensively classifies the quantitative financial disclosures in firms' 10-Ks, including those hidden in the footnotes and the MD&A, we show that disclosures of non-operating and less persistent income-statement items are both frequent and economically significant, and increasingly so over time. Adjusting GAAP earnings to exclude these items creates a measure of core earnings that is highly persistent and that forecasts future performance. Street earnings for firms that meet or just beat analyst expectations are more likely to selectively exclude these items. Analysts and market participants also are slow to impound the implications of these items. Trading strategies that exploit cross-sectional differences in firms' transitory earnings produce abnormal returns of 7-to-10% per year.

  Keywords: core earnings; transitory earnings; non-operating earnings; quantitative disclosures; Equity Valuation; big data; Business Earnings;

  Citation:

  Rouen, Ethan, Eric C. So, and Charles C.Y. Wang. "Core Earnings: New Data and Evidence." Harvard Business School Working Paper, No. 20-047, October 2019. (Revised November 2019.)  View Details

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