Corpus ID: 208812709

Corporate Governance and Equity Risk

  title={Corporate Governance and Equity Risk},
  author={Axel H. Kind and Frederic Menninger},
This paper studies the influence of corporate governance on equity risk. By using a Regression Discontinuity Design applied to shareholder proposals which fail or pass by a small margin, we obtain causal estimates of the influence of corporate-governance provisions on three forward-looking measures of equity risk extracted from option prices: (i) total volatility, (ii) idiosyncratic volatility, and (iii) equity beta. An improvement of the G-Index by one point increases expected stock-return… Expand
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