The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
The Outreach and Education function engages, empowers and educates the Second District communities that the Bank serves, especially civic leaders, students, educators, small business owners, policymakers and the general public. It furthers the Bank's commitment to the region by listening to the communities we serve and leveraging our unique attributes to positively impact school and university programs, as well as analysis and research.
To provide a framework for broadening the understanding of the issue of corporate governance, as well as to identify key areas of future research, the New York Fed solicited several papers by recognized specialists in the fields of law, financial accounting, and financial economics. The papers, along with a contribution by two New York Fed economists, offer insight into corporate governance generally and as it applies to the banking industry.
The first group of academic studies reviews the literature on governance. The papers consider the role played by the board of directors, compensation, monitoring by holders of large blocks of stock, and corporate disclosure in mitigating the conflicts of interest that can exist between corporate managers and shareholders.
The second group sheds light on why banks differ from firms in unregulated industries, and describes the challenges that the differences present for regulators, bank managers, investors, and depositors.
The contents are as follows: Part 1: A Review of the Literature on Corporate Governance
"Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature," by Benjamin E. Hermalin, University of California, and Michael S. Weisbach, University of Illinois.
"Executive Equity Compensation and Incentives: A Survey," by John E. Core, Wayne R. Guay, and David R. Larcker, University of Pennsylvania.
"A Survey of Blockholders and Corporate Control," by Clifford G. Holderness, Boston College.
"Transparency, Financial Accounting Information, and Corporate Governance," by Robert M. Bushman, University of North Carolina, and Abbie J. Smith, Harvard Business School.
Part 2: The Governance of Banks
"The Corporate Governance of Banks," by Jonathan R. Macey and Maureen OHara, Cornell University.
"Incentive Features in CEO Compensation in the Banking Industry" by Kose John, New York University, and Yiming Qian, University of Iowa.
"Is Corporate Governance Different for Bank Holding Companies?" by Rene Adams and Hamid Mehran, Federal Reserve Bank of New York.