Seven 'myths' in corporate governance

Amid the tens of thousands of words that academics produce each month, every so often someone seeks to slice through the verbiage and sum up the essence. That's probably the motivation that lies behind the decision of the Rock Center at Stanford to issue this concise (though less than rigorous) view of what people have been saying about corporate governance in the last half-dozen years or so. David Larcker and Brian Tayan have identified seven such myths, ideas that have developed and that "continue to be accepted, despite a lack of robust supporting evidence":

1. The structure of the board always tells you something about the quality of the board
   
2. CEOs in the U.S. are overpaid
   
3. Pay for performance does not exist in CEO compensation contracts
   
4. Companies are prepared to replace the CEO if needed
   
5. Regulation improves corporate governance
   
6. The voting recommendations of proxy advisory firms are correct
   
7. Best practices are the solution to bad governance

Inviting readers to respond is another odd touch for an academic output, but then this may well be an attempt to stimulate consulting business – or lunch invitations – as much as to dispel fuzzy thinking.

Source document: The provocation "Seven Myths of Corporate Governance," by David Larcker and Brian Tayan of Stanford University, is an 11-page pdf file.