visit my official indiana university, kelley school of business page
academic member, european corporate governance institute, ecgi, (since 2021); project management professional, PMP® (since 2011)
twelve plus (12+) years of diverse industry and business management experience; an updated copy of my CV is available via email to kwabara at iu dot edu research focus...
my research focuses on the economic performance effects of corporate purpose and governance at various stages of a firm’s life cycle: from launch to growth, shake-out, maturity, and decline. i view corporate purpose as the weighted average of the individual sense of purpose of the human actors within a firm, especially those of its leaders. it is a firm’s “core reason for being, its impact on the world,”1 and a crucial determinant of its environmental, social, and governance (esg) imprints. i view corporate governance simply as how a firm directs and controls its affairs toward its purpose. overall, my research situates nicely at the intersection of several related subfields: corporate, behavioral, and entrepreneurial finance; industrial organization; corporate law and financial regulation; technology and innovation; energy economics and environmental policy. the breadth of my research interests derives mainly from my diverse industry and business management experience. however, the depth is streamlined and goes through only four unified themes: corporate purpose, governance, opportunities and risk management, and sustainable financial performance (pgorp, for short). i use my pgorp research paradigm as a four-pronged comb for extracting salient research questions. working papers...
how many female seats on a board? board gender-diversification, power, risk-taking, and financial performance, (single-authored, job market paper)
Using a novel combination of empirical tools and analyses, we demonstrate that if a female director is unlikely to have any personal power or influence on the board, her addition to the board will have no significant impact on firm risk-taking and performance. However, with increasing power/influence on the board (via greater numerical strength or non-token aggregate position), female directors will tend to reduce the excessive risk-taking behavior of the firm and, to the extent that the gender-diversification process is non-disruptive, this effect can feature significant increases in profitability and firm value. We also show that the increase in profitability is driven not by the market timing of equity issues but by the sale of less productive physical assets, more retained earnings, paid-down debt, and less cash flow volatility. Overall, our results show that board gender diversity affects corporate risk-taking culture and firm performance in a value-maximizing manner, particularly when gender diversification is both non-tokenistic and non-disruptive.
award: part of my composite essay that won the 2021 WFA-CFAR Outstanding Ph.D. Student Paper (and a $1,000 cash prize)
media: a summary of some parts of this paper appeared on the WFA-CFAR SeeFar Magazine, Spring 2021 Issue.
group gender diversity, individual power and influence, and collective risk-taking, (single-authored)
Using the multiple Emmy Award-winning television game show, Cash Cab, as a pseudo-laboratory, we find that the presence (or addition) of one powerful or influential female in (to) a small (previously homogeneous male) group significantly reduces the group’s willingness to take qualitatively excessive financial risks. If, however, a group (of at least three persons) consists of one such female, adding more females does not significantly alter the risk-taking behavior of the group. Overall, our results show that an individual’s or a subgroup’s share of power and influence, not just numerical strength, determines whether their tendencies (e.g., relative risk-taking behavior) manifest in collective decisions/outcomes.
award: part of my composite essay that won the 2021 WFA-CFAR Outstanding Ph.D. Student Paper (and a $1,000 cash prize)
media: a summary of some parts of this paper appeared on the WFA-CFAR SeeFar Magazine, Spring 2021 Issue.
religiosity, higher purpose, and the effectiveness of intense board oversight , (joint with Todd Milbourn)
Using a novel measure, we study how the personal religiosity (or sense of higher purpose) of independent directors affects the effectiveness of their intense board oversight. We find that, relative to their non-religious counterparts, religious monitoring-intensive
directors exhibit significantly lower sensitivity of CEO turnover to firm performance over a holding period of 1 year. However, for the more extended holding period of 2 years, this difference in sensitivity significantly switches direction, consistent with the “higher purpose, incentives, and economic performance” theory, which suggests that believers in higher purpose will tend to hold a longerterm perspective. We also find that religious monitoring-intensive directors further reduce both earnings management and excess
total CEO compensation, especially when the lead independent director and/or a majority of the principal monitoring committee chairs are also religious. Overall, our findings show that religious monitoring-intensive directors differentially influence intense board oversight results and, thereby, help infuse or propagate a corporate culture consistent with an authentic organizational higher purpose.
media: featured on Columbia Law School’s Blog on Corporations and the Capital Markets.
work in progress...
higher purpose, longer-term perspective, and firm value preservation, (joint with Todd Milbourn, ...)
This paper builds on our previous research that shows that religious monitoring-intensive directors differentially influence intense
board oversight results and, thereby, help infuse or propagate a corporate culture consistent with an authentic organizational higher
purpose. Specifically, we show that the longer-term perspective on CEO-performance evaluation of the higher purpose directors
leads to an increase in long-term investments and the dematerialization of the expected loss in firm value when the board is
monitoring-intensive. We also find, empirically, that the dematerialization of the anticipated loss in firm value due to intense board
oversight is not driven by greater independent director involvement in formal board advising activities (as boards are not more likely
to be advising-intensive when they are non-monitoring-intensive than when they are monitoring intensive). Instead, at best,
advising-intensiveness and monitoring-intensiveness co-move, as both are driven by firm complexity. Nevertheless, when the higher
purpose directors dominate the monitoring activities, the non-higher purpose directors dominate the advising activities suggesting
that both types are needed, consistent with the higher purpose, incentives, and economic performance theory.
teaching...
visit my teaching page
notes...
1. https://www.mckinsey.com/featured-insights/corporate-purpose#
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