POTSDAM - Researching corporate scandals - specifically why there are so many in the United States and so few in the United Kingdom - will be the focus of a visit by Clarkson University Associate Professor of Finance Allan A. Zebedee to London this fall.
Mr. Zebedee will be spending the fall 2013 semester at the University of Roehampton in London as part of a Fulbright Scholar grant.
Fulbright is a grant process thats sponsored by the State Department. They put out a call for grants each year. An application is submitted in August, and they review the application, he said.
Mr. Zebedee submitted his grant application which was reviewed by the State Department officials as well as officials in England.
I went through the interview process with the English Fulbright Association. I applied in August and signed my contract last week. It is a fairly drawn out process. It is a rigorous screening process, he said. Its really exciting and a great honor to get through the process.
Fulbright grants are available for teaching and/or research, according to Mr. Zebedee, who said they are sponsored by the United States Department of State and institutions world-wide. In his case, the grant is sponsored by the University of Roehampton.
They are designed to promote mutual understanding between the people of the United States and the people of other countries of the world.
With my grant, the focus is on research Id like to do tied to the United Kingdom, he said.
While in London, Mr. Zebedee will conduct research examining corporate scandals and the interplay between government regulations, corporate governance and executive behavior, with a particular focus on differences between the United States and the United Kingdom.
My own research is corporate governance and the differences (between the United States and United Kingdom) and how those differences potentially lead to corporate scandals, he said.
Despite the increased globalization of our financial markets, large corporate scandals surrounding executive compensation have for the most part been limited to the U.S. financial markets, he said. Why? One explanation is clearly regulation, but while in London I will be examining alternative explanations, including differences in the corporate governance structures in the U.S. and U.K.
Mr. Zebedee said the research is a timely topic that he has been studying.
This is consistent with my own research. I try to be topical. I think its really important not only in terms of research, but in terms of assignments in the classroom to try and answer timely questions based on theoretic reasoning. Ive tried really hard to have a focus on these topical matters. Thats the way I teach, too, he said.
Mr. Zebedee received his Ph.D. degree in economics from the University of California at San Diego under the direction of Nobel Laureate Robert F. Engle. Prior to joining Clarkson, he taught at San Diego State University and was an economic fellow at the United States Securities and Exchange Commission in Washington, D.C.
I used to work as a research fellow for the Securities and Exchange Commission in Washington, D.C. While there I worked on the litigation team and was involved in researching corporate scandals, he said.
A lot of these scandals, while theyre very generic, many companies have similar issues. They seem to be isolated to United States companies, Mr. Zebedee said.
For example, he said, one of the practices investigators look for is option backdating, altering the date a stock option was granted to an earlier or later date to make them valuable or more valuable when the option strike price - the fixed price at which the owner of the option can purchase stock - is fixed to the stock price at the date the option was granted.
To be legal, backdating must be clearly communicated to the company shareholders, properly reflected in earnings and properly reflected in tax calculations.
There was a scandal about four or five years ago about option backdating. Executives were backdating compensation options to get paid more, Mr. Zebedee said. Its not illegal, but they have to disclose it to their shareholders. There was a question of whether they were disclosing (the information).
Yet, he said, it seems to be more of an issue in the United States than in the United Kingdom, and that will be the subject of his research in the fall.
The question is why. My investigation is looking at the United Kingdom and trying to investigate why, Mr. Zebedee said.
One option, he said, might be in the different regulatory standards. He said the regulatory standards are a bit stricter in the United Kingdom.
As part of his research, Mr. Zebedee said, hell be looking at the level of scrutiny shareholders might require. He said if there are many shareholders, they might lose oversight of management. In the United Kingdom, there is a more concentrated ownership, he said.
I want to investigate whether that is a partial explanation for corporate scandals, he said. Im really excited about the research agenda, and the ability to go to the United Kingdom allows me to get into these issues much deeper.
The trip will also have a special personal meaning to Mr. Zebedee.
I have previously lived in England. It has a special meaning to me with the chance to return to England as a faculty member. It will be my first chance to go back in 25 years, he said.
Clarkson University has had six faculty members participate in the Fulbright Scholar program over the past five years, visiting countries on four different continents, including South Korea, Croatia and Uganda. Mr. Zebedees Fulbright Scholar grant represents the 34th Fulbright Award granted to Clarkson University faculty.
Supporting the Fulbright Scholar program is important to Clarkson University in our pursuit of excellence in both research and teaching. The exposure our faculty gain through global experiences like the Fulbright program helps promote a richer more diverse environment for our students, Clarkson President Anthony G. Collins said.
We are especially excited for Professor Zebedee as he moves to London in pursuit of his research interests and look forward to his returning to campus to share his experiences with our community, he said.
The School of Business is proud to have another faculty member recognized as a Fulbright Scholar, said Dayle M. Smith, incoming dean of the School of Business and a Senior Fulbright Scholar in Hong Kong in 2010-11. Professor Zebedees experience abroad will prove invaluable to our students as it helps them to gain a better understanding of how different cultures do business.