November 2009

Beneficial or Detrimental Legislation?
Responding to reports of corrupt business behavior by Enron, Tyco, and other large corporations, the U.S. Congress passed the Sarbanes-Oxley Act in 2002. Thomas Lys suggests that the legislation has fallen short of its goal of controlling illegal business practices.

Daniel Cohen

Aiyesha Dey

Thomas Lys

June 2009

Driven Offshore
In 2002 the U.S. Congress responded to the corporate governance crisis that followed the scandal-ridden behavior of Enron, Tyco, WorldCom, and other high-profile corporations by passing the Sarbanes-Oxley Act (SOX). The legislation set out to restore investors’ confidence in financial markets by improving corporate governance. However, in the case of at least one group of companies, the act seems to have produced unexpected results. A study co-authored by Thomas Lys (Professor of Accounting Information & Management at the Kellogg School of Management) indicates that the managements of poorly governed foreign-domiciled firms responded to the act by closing shop in the United States.

Peter Hostak

Emre Karaoglu

Thomas Lys

Yong Yang

September 2007

Are Large CEO Severance Packages Justified?
Research supports three motivations behind executive severance agreements: to encourage risk-taking, to provide job insurance, and to compensate CEOs in the instance of confidentiality requirements. While the question of whether or not CEO severance packages are excessive will certainly remain controversial, it is clear that the existence of substantial CEO severance packages has a theoretical foundation.

Thomas Lys

Tjomme O. Rusticus

Ewa Sletten