Corporate Governance Practices For Initial Public Offerings In The United States

This report examines the corporate governance practices of 50 U.S. companies at the time of their initial public offerings (IPOs) and finds that pressure to update governance practices at larger companies has had a limited effect on IPO-stage companies.

Praise for Corporate Governance Best Practices "A thorough and thoughtful guidebook on the governance lay of the land." -Professor Charles M. Elson, Woolard Chair in Corporate Governance and Director of Weinberg Center for Corporate Governance, University of Delaware "Frederick Lipman provides a comprehensive approach to best corporate governance practices for all organizations, which is current, thoughtful, and practical. Directors and corporate governance personnel of public, private, and not-for-profit organizations must read this book." -Professor Raphael H. Amit, Director of Goergen Entrepreneurial Management Program, Wharton School of Business "Fred Lipman is considered by many directors and CEOs to be the preeminent expert on corporate governance in the country. His advice on this important topic, which impacts the boards of all types of organizations-public, private, and not-for-profit-is required reading in this day and age." -Frederick (Ted) Peters, Chairman and Chief Executive Officer, Bryn Mawr Bank Corporation (aka The Bryn Mawr Trust Company) "Boards of directors must be aware of best corporate governance practices in order to be effective in their oversight role and that is true for all not-for-profit organizations, including universities, as well as public and private companies. Frederick Lipman has authored a practical and comprehensive guide to 'best practices' for all boards of directors, which is required reading." -George P. Tsetsekos, PhD, Dean, Bennett S. LeBow College of Business, Drexel University "In a world of 'good,' 'better,' 'best,' where 'good' and 'better' may not be good enough, Fred Lipman's new book is a straightforward, and even comforting, compendium of BEST governance practices for serious directors. It is a handy and reassuring tool for the conscientious." -Allen R. Freedman, Audit Committee Chairman, StoneMor Partners LP,Founding Director, Association of Audit Committee Members

The book is a compilation of three related essays on initial Public Offerings, liquidity, productivity growth and corporate governance. The first essay looks at the long run performance of initial public offerings (IPOs) in the United States relative to their liquidity profile. The book provides a liquidity based explanation for why certain IPOs underperform in the long run. The second essay relates corporate governance to a firm s productivity growth. Given technology and industry constraints, some firms are very efficient whereas others are not and some firms have much faster rates of innovation and productivity growth than others. The book seeks to provide an explanation by looking at the relationship between a firm s governance structures and total factor productivity. The third essay connects the first two essays. It looks at the differences in the long term performance of IPOs with strong and weak corporate governance.

In a corporations financial life going public by means of an IPO is probably the single most important decision. It turns a private company into a public one. Our book will provide an inside view of the IPO process. On the one hand, it draws on the insights of an experienced investment banker, who has gone through numerous IPO transactions. On the other hand, it relates the story of an actual IPO through the eyes of a Chief Executive Officer who has taken two of his companies public. This unique double perspective is our books defining feature. We do not discuss initial public offerings in a textbook style fashion. What we would like to bring out is a more comprehensive portrayal of a once-in-a-lifetime event for most companies and their management, alike.

Initial Public Offerings (IPOs) are unique economic and governance events as privately held firms issue common stock or shares to the public for the first time. The governance issues surrounding IPOs are relatively unexamined compared to more established, and usually larger, firms. As such, they provide a unique context to study corporate governance and its development around the world. Based on a collaborative international research project, this book analyses the corporate governance of IPOs in twenty-one countries, each of which is characterized by different governance environments and different levels of IPO activity. The end result is a broad and deep assessment of governance practices and IPO activity for an array of economies that represent roughly 80 percent of the global economy. These chapters collectively provide new insights into what a global theory of corporate governance might look like and offer guidance to policy makers and academics regarding national governance configurations.

An overview of the most important aspects of planning, launching and completing a successful IPO.Written by Wilson Sonsini Goodrich & Rosati and published by Merrill Corporation, this booklet is organized into three major chapters.Chapter One discusses the period leading up to a decision to proceed with an initial public offering, with a focus on the prerequisites to, as well as the costs and benefits of, proceeding with an initial public offering and becoming a public company.Chapter Two addresses the decision to proceed with the offering and continues through the closing of the sale of the shares to the public. Chapter Three concludes with a discussion of certain consequences of becoming a public company, including the company's disclosure obligations, corporate governance requirements, trading restrictions and reporting obligations.

In March 2003, the Australian Stock Exchange (ASX) released new corporate governance guidelines, which included debatable “best practice” recommendations such as the adoption of an independent board and separation of the roles of chairperson and CEO. Given the premise that strong corporate governance enhances shareholder value and, by extension, increases initial public offering (IPO) issuers’ appeal to investors, this thesis assesses the level of conformity by a sample of Australian firms, which made an IPO between 1994 and 1999, with the best practice recommendations. We also examine the relationship between firm outcomes (including IPO underpricing, post-IPO long-run performance, and the likelihood of a SEO) and board governance quality, captured by board composition, board leadership, board size and share ownership of directors. These outcomes are addressed as they are important dimensions of firm performance that may be reasonably assumed to be associated with the quality of corporate governance, and these tests can provide an insight into the preference of investors who arguably are best placed to assess the appropriateness of the recommendations promoted by the ASX. Further, we analyse changes in IPO firms’ board structures from the time of listing to five years later to determine if IPO firms adopt governance structures that are more in line with the best practice recommendations after listing and if the changes are related to IPO firms’ long-run performance. Overall, we find that IPO firms that arguably have the strongest incentive to adopt the “optimal” board structures diverge substantially from ASX’s recommendations both at the time of IPO and five years later. IPO firms’ board structures are found to be unrelated with the level of IPO underpricing and board size, after controlling for the size of the firm, is significant in explaining both long-run aftermarket performance and the probability of a SEO. IPO firms with larger boards and those that increase the board size after listing are found to perform better in the long-run. However, contrary to expectation, smaller boards are associated with a higher likelihood of equity reissuance. Overall, the results lead us to question the role played by the board of directors in signalling firm quality. Our findings also suggest that ASX’s best practice recommendations are likely to distort the market-driven practices already in place.

Using detailed case studies of the first nine mainland Chinese companies to be listed on the Hong Kong stock exchange (1993 94), Alice de Jonge examines the evolution of corporate governance law and culture in China s H-share market. A story emerges not of tensions between ideas of corporate governance from two different legal systems Hong Kong vs. mainland Chinese nor about legal convergence as China adopts concepts from Anglo-American jurisdictions. Rather, it is a story of individual firms being pragmatic in mediating the different agendas of state-agencies that own or control them. Corporate Governance and China s H-Share Market looks at corporate governance in a cross-border context is unique in providing a detailed understanding of China s H-share market reveals why a beer company was the first ever Chinese firm to be listed overseas. This fascinating work will appeal to postgraduate students and scholars of corporate governance, Asian law and legal systems and Asian business, as well as Chinese scholars more generally. Professionals such as law practitioners working in Chinese law will also find the book of interest.

This Book is your comprehensive yet concise guide to take your company public in the U.S. capital markets. Imagine a moment of transformation, where a company steps out from the shadows of private ownership into the bright lights of the public stage. That's right, we're talking about an Initial Public Offering ("IPO") – a dazzling debut where a company's shares make their first appearance to the world at large. It's like a grand entrance at a high-profile gala, where the company is the belle of the ball, and the public is the eager audience. “A must-read for anyone looking to navigate the complex world of U.S. IPOs. This book is not only comprehensive but also engaging, making the intricacies of going public in America accessible to a wide audience. Highly recommended!” - China Listed Companies Association “An insightful and well-researched guide to the U.S. IPO process. The author‘s expertise shines through on every page, providing invaluable information for entrepreneurs and investors alike. A professional and compelling read” - InterContinental Financial Group “This book is a treasure trove of knowledge for anyone interested in the American public markets. The author's clear and concise writing style makes even the most technical aspects of IPOs understandable and engaging. A definite addition to our Group’s bookshelf” - Manhattan Securities Group “A truly remarkable work that demystifies the process of going public in the U.S. The author's passion for the subject is evident in every chapter, making this book a joy to read and an essential resource for anyone in the field” - China International Finance Foundation "An excellent resource for both novices and seasoned professionals in the world of finance. The author's ability to distill complex IPO processes into digestible content is commendable. A must-have for anyone looking to go public in America” - Guo Huan Law Firm (China Renowned Law Firm)