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Corporate Conflicts of Interest

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  • Joel S. Demski

Abstract

This paper surveys conflicts of interest in the corporate governance arena, with emphasis on auditors, boards of directors, analysts and investment bankers, regulators, management, attorneys and investors. Enron provides a host of examples as well. I stress the multifaceted nature of these conflicts, and the fact most research looks at some conflicts, such as auditor independence, absent the larger setting and potential interactions among various players. I further speculate herding behavior is an important explanatory device in understanding periodic failures.

Suggested Citation

  • Joel S. Demski, 2003. "Corporate Conflicts of Interest," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 51-72, Spring.
  • Handle: RePEc:aea:jecper:v:17:y:2003:i:2:p:51-72
    Note: DOI: 10.1257/089533003765888421
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/089533003765888421
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    References listed on IDEAS

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    Cited by:

    1. Besancenot, Damien & Vranceanu, Radu, 2007. "Equilibrium (dis)honesty," Journal of Economic Behavior & Organization, Elsevier, vol. 64(2), pages 232-249, October.
    2. Ugo Albertazzi, 2006. "Incentives in universal banks," Temi di discussione (Economic working papers) 572, Bank of Italy, Economic Research and International Relations Area.
    3. Bryan K. Church & Xi (Jason) Kuang, 2009. "Conflicts of Interest, Disclosure, and (Costly) Sanctions: Experimental Evidence," The Journal of Legal Studies, University of Chicago Press, vol. 38(2), pages 505-532, June.
    4. Cornett, Marcia Millon & McNutt, Jamie John & Tehranian, Hassan, 2009. "Corporate governance and earnings management at large U.S. bank holding companies," Journal of Corporate Finance, Elsevier, vol. 15(4), pages 412-430, September.
    5. Besancenot, Damien & Vranceanu, Radu, 2009. "Strategic managerial dishonesty and financial distress," Research in Economics, Elsevier, vol. 63(1), pages 11-21, March.
    6. Çule, Monika & Fulton, Murray, 2009. "Business culture and tax evasion: Why corruption and the unofficial economy can persist," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 811-822, December.
    7. James K. Self, 2006. "Asymmetric Stationarity in National Stock Market Indices: An MTAR Analysis," The Journal of Business, University of Chicago Press, vol. 79(6), pages 3153-3174, November.
    8. Mahoney, Joseph T., 2012. "Towards a Stakeholder Theory of Strategic Management," Working Papers 12-0100, University of Illinois at Urbana-Champaign, College of Business.
    9. repec:kap:iaecre:v:17:y:2011:i:4:p:421-435 is not listed on IDEAS
    10. Francesco Giuli & Marco Manzo, 2005. "Protecting Savings: Do We Need a Supervision Authority?," Working Papers 84, University of Rome La Sapienza, Department of Public Economics.
    11. Norman, Carolyn Strand & Rose, Anna M. & Rose, Jacob M., 2010. "Internal audit reporting lines, fraud risk decomposition, and assessments of fraud risk," Accounting, Organizations and Society, Elsevier, vol. 35(5), pages 546-557, July.
    12. Alia Miledi & Benoit Pigé, 2013. "Le Jugement Professionnel En Audit : Enquete Aupres Des Associes Signataires," Post-Print hal-01002359, HAL.
    13. Besancenot, Damien & Vranceanu, Radu, 2004. "The Information Limit to Honest Managerial Behavior," ESSEC Working Papers DR 04008, ESSEC Research Center, ESSEC Business School.
    14. Samir El-Gazzar & Kwang-Hyun Chung & Rudolph Jacob, 2011. "Reporting of Internal Control Weaknesses and Debt Rating Changes," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(4), pages 421-435, November.
    15. repec:kap:jbuset:v:157:y:2019:i:2:d:10.1007_s10551-017-3694-0 is not listed on IDEAS
    16. Sah, Sunita & Loewenstein, George, 2015. "Conflicted advice and second opinions: Benefits, but unintended consequences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 130(C), pages 89-107.
    17. Rodolfo Apreda, 2012. "A clinical approach to the governance of conflict-systems," CEMA Working Papers: Serie Documentos de Trabajo. 491, Universidad del CEMA.

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