From 1989 through 1993, the United Shareholders Association (USA) published its Shareholder 1000 report, which ranked 1000 firms on several dimensions of corporate performance, including shareholder rights and management compensation. We examine two measures reported by the USA of the alignment between managers' and shareholders' interests: a shareholder rights score and a management compensation rating. The associations between these measures and measures of operating performance and investment levels are analyzed. We find evidence that the USA shareholder rights and management compensation scores are significantly and positively associated with measures of operating performance and investment spending. Further tests indicate that USA management compensation scores proxy for aspects of corporate behavior that have significant valuation implications not reflected in financial statements.

This paper investigates the association between premia paid in targeted share repurchases (greenmail) and the characteristics of the boards of directors. A nonlinear relationship is found between the premium paid and the proportion of shares held by the inside directors. The premium decreases as the proportion of unaffiliated outside directors increases.

The Securities and Exchange Commission now requires auditors to review interim earnings reports on a timely basis. Previously, auditors could perform this review retrospectively, as part of the year-end audit. We investigate whether timely reviews are likely to increase the relevance and reliability of reported earnings, as reflected by the extent to which the earnings-return relation is contemporaneous. We find that when the auditor reviews interim earnings on a timely basis, the association between quarterly returns and earnings (and between quarterly returns and unexpected earnings) is predominantly contemporaneous. When the auditor reviews interim earnings retrospectively, however, the association between quarterly returns and earnings is not entirely contemporaneous; with retrospective reviews, returns lead interim earnings. We conclude from these findings that timely reviews increase the likelihood that accounting earnings reflect economic events contemporaneously with returns.