Paul Healy is the James R. Williston Professor at the Harvard Business School. His research covers a broad range of topics, including white collar crime, governance, business ethics, financial analysis, and Wall Street research. He joined the HBS faculty in 1998, after fourteen years on the faculty at the M.I.T. Sloan School of Management, where he received awards for teaching excellence in 1991, 1992, and 1997. He received accounting and finance degrees from Victoria University in New Zealand (1976 and 1977) and a Ph.D. from the University of Rochester (1981). He has published widely in the leading academic and practitioner journals, has received numerous research rewards, and is the co-author of one of the leading financial analysis textbooks. He has taught MBA and executive courses on accounting, financial analysis, corporate boards, and ethical leadership.
Personal Relationships and Enforcement of Management Controls: An Analysis of Punishments for Perpetrators of Economic Crimes
To explore how companies enforce management control systems, we examine whether social relationships influence the severity and consistency of punishments for main perpetrators of corporate economic crimes. We find wide variation in rates of dismissal and prosecution of the main perpetrators, and that punishment rates are lower for senior management than for middle managers and junior staff. The negative relation between seniority and punishment severity, however, holds only for senior male perpetrators, who receive more lenient punishments than senior female perpetrators or more junior perpetrators controlling for the type and economic magnitude of the crime. These findings are more pronounced in organizations that operate in countries with more gender inequality, have less frequent updates to internal controls, do not report the crime to regulators, and do not disclose their identity in the survey. We interpret these findings as evidence that the main perpetrators’ personal connections with punishment decision-makers influence the severity of their punishments and the consistency with which management control systems are enforced.
Directors’ Perceptions of Board Effectiveness and Internal Operations
We contribute to the growing literature on the effectiveness of corporate boards by examining the effect of two insights that have been largely unexplored in prior studies that use public data. First, since boards’ responsibilities are wide-ranging, more holistic performance measures may better capture the full range of their duties than specific public actions. And second, because corporate boards share many characteristics of other types of teams, their effectiveness is likely to be influenced by their internal operations. To examine the performance effects of these insights, we use data from 577 directors of U.S. public firms that responded to a survey we conducted in 2015-2016 and qualitative data from interviews of 75 directors. Our study establishes a strong relation between director perceptions of board performance effectiveness and internal board operations. Further, by highlighting the critical role of internal operations, identifying areas of relative strength and weakness in boards’ effectiveness in various activities, and probing director perceptions of their primary responsibilities, we are able to offer concrete suggestions for future research on board effectiveness.
Multinationals frequently operate in locations where laws against corruption are not widely enforced. We examine ratings of self-reported anticorruption efforts for 480 multinationals to better understand what factors underlie their efforts and their performance consequences. Not surprisingly, country and industry corruption risks, as well as regulatory enforcement and monitoring, are important drivers of firms' anti-corruption efforts. Performance tests suggest that firms' decisions on how to manage corruption risk are as much ethical as economic. Co-authored by George Serafeim
On November 15, 2006, German prosecutors raided offices and homes of Siemens AG staff as part of an ongoing investigation into bribery. The subsequent investigations covered business representing 60% of Siemens' revenues and spanned operations in Asia, Africa, Europe, the Middle East, and the Americas. Through interviews with key Siemens executives and supporting internal materials, this multimedia case takes a look at how one of the world's largest companies faced corruption head-on.
