Al-Habbyel Yusoph

How do firms adjust internal monitoring when legal constraints on managerial negligence weaken? I study Delaware's 2022 officer-exculpation reform using job postings for 5,258 U.S. public firms. Treated firms increase monitoring hiring by roughly 6 percent, with effects across risk management, compliance, accounting, audit, and legal roles.

The evidence supports two channels: firms substitute internal monitoring for weaker external legal discipline, and they expand monitoring when the reform enables riskier, harder-to-evaluate activity. Treated firms increase R&D, not capital expenditure, and exhibit higher idiosyncratic risk.

Do firms adjust prices before climate regulation imposes costs? We study U.S. airlines after the EPA's 2015 aircraft greenhouse-gas endangerment proposal, a credible signal of future carbon regulation with no immediate compliance costs.

Airlines with older fleets raise fares by 5-6 percent more after the signal. The response is concentrated in owned and capital-leased aircraft, where carriers bear residual-value risk, and is stronger for financially constrained carriers. The evidence suggests that product-market pricing can serve as a forward-looking risk-management tool.

Executive bonus scorecards have become more uniform within top management teams: among S&P 1500 firms, fully common scorecards rise from about 60 percent in 2006 to more than 85 percent by 2022. We call this convergence executive herding.

Greater metric homogeneity predicts higher next-year idiosyncratic volatility, but not systematic volatility. The pattern is consistent with an information-architecture channel: common scorecards focus executives on the same signals, making judgment errors more correlated and reducing the value of role-specific disagreement.