Al-Habbyel Yusoph

I examine whether reducing executive liability changes firms' demand for internal monitoring. Delaware's 2022 officer-exculpation reform authorized corporations to adopt charter provisions limiting covered officers' monetary liability for eligible duty-of-care breaches. Using firm-quarter job postings from U.S. public firms, I compare Delaware-incorporated firms with non-Delaware firms in a difference-in-differences design. Following the reform, the share of monitoring postings rises 7.25% more at Delaware firms.

The increase spans risk, compliance, accounting and audit, and legal roles and is stronger in R&D-intensive and uncertain industries, consistent with greater demand for process information when projects are difficult to evaluate. R&D spending and idiosyncratic risk show positive associations, while capital expenditures do not. These associations are consistent with increased risk-taking following the reform. The monitoring response is weaker with stronger external oversight and larger monitoring staffs. The findings show that changes in executive liability can alter firms' demand for internal monitoring.

Do firms raise prices before anticipated climate regulation imposes costs? We use the EPA's 2015 proposed aircraft Endangerment Finding in a route-level difference-in-differences design. One standard deviation of fleet age raises fares by 5-6 percent after the signal. The mechanism is anticipatory cost pass-through: older fleets face higher expected compliance costs, so exposed carriers adjust fares before the rule binds.

How do common executive performance metrics shape firms' project choices and risk? In S&P 1500 bonus-scorecard data, fully homogeneous scorecards rise from 62 percent of teams in 2006 to 86 percent in 2022 and predict more R&D, fewer acquisitions, and higher idiosyncratic—but not systematic—volatility. The mechanism is coordinated risk-taking: shared metrics align executives' payoffs around the same projects, raising firm-specific risk without increasing exposure to economy-wide shocks.