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Welcome to Center for Corporate Governance Newsletter. We hope you will enjoy the updates and insights. Happy reading!

Research: Essays on Corporate Governance and Sustainability

Short Abstract 

David Jonas Schröder’s recent accepted PhD thesis comprises a brief synopsis and five independent essays, each exploring central themes in corporate governance and accounting. The first essay examines foundation ownership as a model for promoting corporate sustainability, showing that foundation-owned companies outperform comparable companies on environmental and social (E&S) dimensions of ESG performance. The second essay examines the financial performance of foundation-owned firms within a global sample of listed companies, concluding that these firms perform at least as well financially as their family- and investor-owned counterparts, while also exhibiting a stronger commitment to employee welfare and investments. The third essay introduces the concept of employee slack - personal wealth exceeding private consumption needs - and investigates its impact on firm adaptation and innovation. It finds that employee slack reduces firm adaptation and innovation activities. The fourth essay investigates the role of political ideology in the making of Environmental and Social (E&S) disclosure regulation, finding political ideology to be the most influential factor across legislative processes. E&S rules are found to be more susceptible to political ideology compared to financial disclosure and direct (non-disclosure) E&S rules. The final essay explores the relationship between corporate social responsibility (CSR) and payout policy in European firms. 

Key findings per essay

• Foundation ownership improves environmental and social performance.
• Purpose and profit can coexist—non-profit foundation ownership offers an effective governance structure.
• Higher employee wealth reduces a firm’s innovative capacity.
• Political ideology plays a key role in influencing the making of E&S disclosure regulation.
• Corporate social responsibility and corporate payouts are a balancing act.

Research: Personal Costs of Executive Turnovers

Short Abstract 

This study by Professor Kasper Meisner Nielsen examines the income loss following forced CEO turnovers using detailed income data from the Danish Tax Authorities. The analysis reveals that dismissed CEOs experience, on average, a 40% decline in personal income over the five years following turnover. This drop is primarily driven by reductions in labor and entrepreneurial income, while other income sources slightly increase. The income loss is significantly greater for executives with poor firm performance, indicating that the executive labor market penalizes perceived low managerial ability. Overall, the findings highlight that forced turnovers come with substantial personal costs for executives, underscoring their role as a powerful internal governance mechanism.

Key findings 

• Substantial Personal Income Loss: CEOs who are forcibly removed from their positions experience a 35–45% reduction in personal income over the five years following dismissal, driven primarily by lower labor and entrepreneurial income.
• Labor Market as Main Driver: The income loss stems mainly from decreased labor market outcomes, rather than financial or passive income, indicating a real drop in professional opportunities and compensation.
• Performance Shapes the Penalty: Executives from underperforming firms face significantly higher personal costs, suggesting that forced turnover acts as a market signal of lower managerial ability.
• Skills and Industry Matter: CEOs with general management skills (rather than firm-specific experience) and those working in knowledge-intensive industries suffer smaller income losses after dismissal.
• Turnovers Reinforce Governance: The findings suggest that the threat of dismissal imposes real economic consequences, making forced CEO turnover a credible and effective tool in corporate governance

The paper was recently featured in the finance podcast Rig på Viden, where Professor Kasper Meisner Nielsen discusses his research with host André Thormann. Tune in to gain deeper insights into the study and its implications for executive careers and corporate governance.

Meet our visitor: Niels Hermes

Center for Corporate Governance has the pleasure of welcoming Otto Mønsted Visiting Professor Niels Hermes from University of Groningen. Professor Niels Hermes is visiting from April to June 2025. Discover more about Niels Hermes’ academic journey and research interests in the interview below.

In which research areas and topics are you working?

My research nowadays focuses on corporate governance, especially board structure, dynamics, and firm ownership. I originally started as a development economist, studying why some countries grow more than others, with a particular interest in the role of financial systems and, later on, microfinance. Over time, I transitioned into corporate governance research, beginning with a 2004 project for the Dutch Government, which examined how Dutch companies reported their compliance with the corporate governance code. Since then, my work has expanded to include topics such as board composition, board member interactions, family ownership, and the link between board characteristics and CSR. I conduct this research primarily on listed companies, but also on NGOs, microfinance institutions, and health organizations.

What aspects of the research environment at Center for Corporate Governance attracted you to conduct your visit here?

I was awarded the Otto Mønsted Visiting Professorship, kindly proposed by Professor Trond Randøy. I would like to thank CBS for making this opportunity possible. Trond and I have worked together on several projects over the years as part of a long-standing collaboration. In addition, I already knew several researchers at the center from conferences.

Another reason for coming here is quite simple: this is a Center for Corporate Governance, and everyone along this corridor works on topics closely related to my own research interests. It’s a great environment where I can discuss ideas and engage with people doing similar work. One of my goals during this stay has been to build new connections, and CCG provides an ideal setting for that.

I also think the center has been very active in the field of corporate governance. CCG stood out to me because of its international and multidisciplinary research environment, bringing together scholars from economics, finance, accounting, management, and even sociology. That fits well with my own view that corporate governance is inherently a multidisciplinary field.

Another factor was to have the opportunity to work on Danish register data, such as from Statistics Denmark. This is a fantastic research resource that is difficult to access without a Danish institutional partner. During my stay, I’ve worked on initiating new projects with researchers from the center.

Finally, I’ve felt very welcome, both professionally and personally. I really enjoy my stay at the center.

News: Enterprise Foundations: A new legal framework for responsible business ownership

Enterprise foundations (EFs) play a crucial role in European society by owning companies and contributing to the public good. Despite their positive impact, EFs face legal challenges due to the separation of for-profit and non-profit entities in European laws.

Under the European Law Institute (ELI), Prof. Steen Thomsen, Prof. Anne Sanders, and project assistant Associate Professor Mark Ørberg, along with many other contributors, have developed a new model law to address these challenges (Draft contribution to a European Enterprise Foundation model law). The project aims to define EFs, promote responsible ownership, improve governance, and ensure tax neutrality.

The final project report, which proposes flexible legal options to support responsible business ownership and enhance competitiveness in Europe, was submitted to the European Law Institute (ELI) in April 2025. As it is still pending approval by the Council, it does not yet represent the official position of the ELI.

Interested in the project report? You can access it by clicking the link below.

News: From Student Assistant to PhD Fellow - welcoming Sarah Plaugmann Gramkow to the next stage of her academic journey

We are delighted to announce Sarah Plaugmann Gramkow as a new PhD fellow at the Center for Corporate Governance. Sarah has been a valued part of the centre for several years. First as a student assistant, then as a research assistant, and is now embarking on her PhD project. 

In her PhD, Sarah uses microeconometric methods and Danish register data to investigate how workplace environments and employee wellbeing influence outcomes such as retention, productivity, sickness absence, and work-related accidents. 

We truly support her continued development and look forward to the insights Sarah will bring to both research and practice.

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