VOLUME 32 NUMBER 3 SUMMER 2020 Journal of APPLIED CORPORATE FINANCE IN THIS ISSUE:

8 Private Equity: Accomplishments and Challenges Private Equity Greg Brown, University of North Carolina; Bob Harris, University of Virginia; Tim Jenkinson, University of Oxford; Steve Kaplan, University of Chicago; and David Robinson, and Public 21 Private Equity and Portfolio Companies: Lessons from the Global Financial Crisis Companies Shai Bernstein and Josh Lerner, ; and Filippo Mezzanotti, Northwestern University 43 Board 3.0: What the Private-Equity Governance Model Can Offer Public Companies Ronald J. Gilson, and Stanford University; and Jeffrey N. Gordon, Columbia University

52 The Growing Blessing of Unicorns: The Changing Nature of the Market for Privately Funded Companies Keith C. Brown and Kenneth W. Wiles, University of Texas at Austin

73 EQT: Private Equity with a Purpose Robert G. Eccles, University of Oxford; and Therése Lennehag and Nina Nornholm, EQT AB

87 Private Equity and the COVID-19 Economic Downturn: Opportunity for Expansion? David Haarmeyer

92 University of Texas Roundtable on LP Perspectives on the State of Private Equity Panelists: Chris Halaska, Memorial Hermann Health System; Tom Tull, Employees Retirement System of Texas; Russell Valdez, Wafra; and Shelby Wanstrath, Texas Teachers Retirement System. Moderator: Ken Wiles, University of Texas at Austin

100 Columbia Law School Roundtable on Public Aspects of Private Equity Panelists: Emily Mendell, International Limited Partners Association; Chris Cozzone, Bain Capital Double Impact; and Donna Hitscherich, Columbia Business School. Moderated by Aamir Rehman, Columbia Business School

108 A CEO’s Playbook for Creating Long-Term Value: Ten Essential Resource Allocation Practices Harry M. Kraemer, Jr., Northwestern University; Michael J. Mauboussin, Counterpoint Global; and Alfred Rappaport, Northwestern University

118 A Tale of Leadership in Value Creation Greg Milano, Fortuna Advisors

128 What Public Companies Can Learn from Private Equity Pay Plans Stephen O’Byrne, Shareholder Value Advisors COLUMBIA LAW SCHOOL ROUNDTABLE ON Public Aspects of Private Equity

Co-Sponsored by The Richard Paul Richman Center for Business, Law, and Public Policy and The Ira M. Millstein Center for Global Markets and Corporate Ownership, in partnership with the Private Equity Program Columbia Law School | New York, NY | November 19, 2019

Emily Mendell Chris Cozzone Managing Director, Bain Capital Double Impact Institutional Limited Partners Association

Donna Hitscherich Aamir A. Rehman Director, Private Equity Senior Fellow, Richman Program and Senior Lecturer Center. Columbia Business in Business, Columbia School Business School

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Aamir A. Rehman: Good evening, I’m about stakeholders and nonfinancial the norms of the countries where they Aamir Rehman, Senior Fellow at the considerations. And as a consequence, are based and invest. To a lesser degree, Richman Center at Columbia Business public considerations inevitably play a the size of their institutions matter, as School and Partner at Hoopoe Capital. I role in private equity analysis, particu- does the extent of their knowledge of want to welcome you all to this discussion larly because private equity institutions private equity. On the basis of these of the public aspects of private equity. intend to make changes to the compa- differences, I characterize three limited The title is intended to be a bit provoca- nies in which they invest. partner approaches to ESG: they are tive. Given the name private equity, one We also will be joined by Chris either ESG leaders, ESG followers, or might assume that it refers to private Cozzone of Bain Capital Double Impact, uninterested in ESG. transactions among private actors, and a pioneer in thinking about sustainable The leaders are largely public that these actors are left to pursue their or socially responsible private equity. pension funds, who spend a consid- returns on investment largely unfettered Chris will tell us about Bain’s business erable amount of time and effort by concerns about the public good or model and how the firm works with designing their investment strategies public accountability. And yet, when we their LP investors to achieve their ESG to reflect their own members’ wishes look at the ecosystem of private equity, objectives. to invest in a socially responsible way. we find many players and institutions Finally, we will be joined by Donna Universities generally have student that in fact do have a social mandate. Hitscherich, Director of the Private bodies with opinions on where money PE firms routinely make important Equity Program and Senior Lecturer should be invested. Foundations usually changes—to expand or shrink compa- in Business here at Columbia Business have specific mission criteria, and some nies, to cut or create new jobs, and to School. Donna will tell us how this all family offices are increasingly interested create sustainable business models— fits into the broader financial universe in ESG investing, particularly with that can have significant social effects for and how private equity seems to be generational turnover. good or ill. Private equity funds and the evolving in ways designed to address But not all our members are as firms that manage them also have a lot social concerns. focused on ESG. The attitudes of corpo- of influence over whether their portfolio Let me begin by asking Emily to tell rate pension managers and sovereign companies create social benefits or not. us how the limited partner members of wealth funds vary widely, depend- And as we’re approaching an election her organization approach ESG. How ing on their particular corporate or year, there are many public policy issues do environmental and other social regime philosophy. Geography seems to consider, from taxation to private considerations affect private equity LPs’ to matter as well. Our Nordic country equity’s effect on social problems like investing decisions? members have shown the most leader- inequality and the environment as well ship, followed by Canadians. Our U.S. as the general economy. The Challenge for LPs: Getting and Middle Eastern members have We will be joined today by Emily ESG on the PE Agenda been slower to adopt ESG strategies. Mendell, who is Managing Director Emily Mendell: Thank you, Aamir, for And our smaller institutions often find at the Institutional Limited Partners having me here today. I represent ILPA, themselves scarce of the critical resources Association (ILPA), which represents the a global organization with about 530 for managing ESG strategies. limited partners who invest in private institutional investors. About 70% of Larger organization like CalPERS equity funds. Collectively, these insti- our members are here in North Amer- or Washington State can hire a chief tutions have invested over $2 trillion ica, about another 20% are in Europe, sustainability officer or ESG head and in private equity alone, representing and the rest are based in Asia, Middle form ESG committees to review all of roughly half of total private equity East, Australia, and New Zealand. Our their investments. It is much more diffi- investments. Many of these limited limited partner members look at ESG cult to institutionalize an ESG strategy partners invest on behalf of public sector very broadly, but from many different at a small family office. Most of the employees, state-owned institutions, or perspectives that seem to evolve almost leaders who are really interested in ESG pension boards or retirement funds. monthly. are mission-driven because their benefi- Such institutions have a social aspect Their perspectives vary with the ciaries want them to be. to their missions, so they naturally care types of limited partner, but also with

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hen we look at the ecosystem of private equity, W we find many players and institutions that in fact do have a social mandate. – Aamir A. Rehman

Nevertheless, there is a growing as a lower middle market fund target- of ESG-oriented funds like Double group of limited partners who have ing financial returns similar to what our Impact in the industry, and how do you realized that their fiduciary duties parent organization expects, but with a see that role evolving? include ESG. For a long time, LPs double mandate— meaning that we also believed that their fiduciary duty was aim to achieve measurable and inten- Some Historical Perspective on PE simply to produce the highest returns. tional, social, and/or environmental Hitscherich: Thanks for having me, But over time, and especially within returns within every one of our portfo- Aamir. I’m here to provide some histor- the last several years, more have realized lio companies. ical perspective on an industry that I’ve that there is a great deal of “headline We accomplish this by looking at all followed for quite a long time. I find the risk” and social risk that comes with the of the various stakeholders that are critical language in this discussion very interest- conventional notions of fiduciary duty. to or affected by the business. When we ing. Some of the terms are a bit slippery, You cannot create long-term value if you look at a business, we look at its custom- though, and so I think it’s useful to don’t take into account negative exter- ers, its employees, the environment, examine them. nalities and engage in risk mitigation. its community, the public sector, its Private equity firms are expected, So more and more LPs are engaging on competitors, as well as groups of second- first and foremost, to earn high rates ESG, with many if not most of them order stakeholders. In every business we of return on their portfolio companies motivated by a deeper understanding of look at, we figure how we could have a and, by so doing, for their LPs. But the investment risks. positive influence on its stakeholders and question we’re addressing here is about find a way to measure that effect. These PE’s “externalities”—their effects on Rehman: Wonderful, Emily. Now let’s measures then become part of the incen- parties other than their LPs—particu- get a manager’s perspective from Chris tive packages of our management teams. larly the negative externalities and how Cozzone. Chris, please tell us how Bain So their compensation depends not only we go about reducing them without Double Impact has integrated ESG into on profitability, but also on the positive affecting those returns. Capital is its investment process and how that impact they have on stakeholders. attracted to those places in the financial plays out in your interactions with LPs In addition to helping our manage- ecosystem with high rates of return. But and portfolio companies. ment teams achieve financial targets, how do ESG concerns affect returns? we work with them to reduce negative How does it make a difference? The Bain Approach to ESG: externalities. We seek to improve three Undoubtedly, making operational A Practitioner’s View social and environmental outcomes in improvements and creating more Chris Cozzone: Thanks, Aamir. Let me particular: (1) the health and wellness efficient capital structures increase the first tell you a little about the double of our customers and our employees, rates of return. But at the end of the day, impact strategy within the Bain Capi- (2) environmental sustainability, and (3) this asset class needs to deliver returns to tal organization. Bain Capital was workforce education and development. Emily’s constituents. Maybe the constit- founded in 1984 and now manages uents think about their investments in over $100 billion of assets. Bain Capi- Rehman: Thanks, Chris. Now let’s turn private equity as a way of balancing tal Double Impact was created in 2015 to Donna. What do you see as the role their portfolios—that is, earning higher

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or a long time, LPs believed that their fiduciary duty was F simply to produce the highest returns. But over time, and especially within the last several years, more have realized that there is a great deal of “headline risk” and social risk that comes with the conventional notions of fiduciary duty. You cannot create long-term value if you don’t take into account negative externalities and engage in risk mitigation. – Emily Mendell returns on activities with larger social that private equity is the number one Rehman: Chris, what can you tell us costs—while accepting lower returns performing alternative asset class within about how Bain measures and monitors on public companies that make larger the private pension system. Our leaders ESG risk? And how do your nonfinan- investments in ESG programs. I can see incorporate ESG criteria and strategies cial metrics interact with the financial something like that happening. directly into their investment decisions. metrics? And then how do you create For a long time, business school They have also decided to avoid catego- incentives both for the firm and also graduates have thought of maximiz- ries of investments, saying, “We will not for your portfolio companies to achieve ing shareholder value as a corporation’s put any of our money into these types those metrics? prime directive. And large CEO stock of industries.” A number of our inves- option grants reflected that priority. tors avoid firearms and pornography, for Cozzone: The metrics are critical. As I But the recent Business Roundtable example; cannabis is another. mentioned, the devil’s in the details. announcement redefines the purpose of Other areas of avoidance we are We define two or three company- a corporation to promote “an economy starting to see include exclusion. LPs specific metrics that are linked to that serves all Americans.” I think this establish those exclusions upfront with positive outcomes, and we measure the change is both good and significant, their general partners in the form of outputs. For instance, when we invested and likely to stay—not least because side letter agreements. And then they in Impact Fitness, we needed to track our European friends are focusing so monitor the general partner to ensure whether we were effectively providing heavily on it. it is living up to the standards that they access to fitness to underserved popula- have set forth. tions. That’s why our key metric, tracked Monitoring and Measuring Many of our members and many monthly, was the percentage of first- ESG Impacts of the general partners are also signa- time users among our new joiners. Each Rehman: I think this whole discussion tories of the Principles for Responsible measurement is company-specific; it is about the centrality of returns is pivotal. Investment, which are guidelines that a tailored measurement directly linked Emily, your members are certainly inter- provide certain investment parameters. to our product or service where there’s ested in return. How do the LPs you These LPs both act on these principles no bridge of assumption. And it’s only referred to as leaders think about inte- and make them public. They have ESG by having these types of metrics that are grating ESG and financial returns? specialists reviewing every deal and GP tied specifically to your business model fund manager for ESG compliance. that your incentives work. Mendell: You’re right that returns are They continue monitoring the GPs after paramount to our members because making their investments and receive Rehman: Do you have to sacrifice profit they need to meet the financial needs complex measurement reports. to score highly on these measures? Have of their beneficiaries. The good news is you seen trade-offs? Emily suggested

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ur role as an impact investor is to find business initiatives O that create value by either increasing profit or reducing risk—and in that sense there is no trade-off between shareholder value and ESG investment … and the longer one’s investment perspective, the fewer trade-offs one encounters. But I won’t claim that there are no trade-offs at all. – Chris Cozzone that ESG integration is a way to miti- making the right decisions for the Blackstone and other companies now gate risk. It’s important for sustainable long haul. The true pioneers of impact have had longer-dated funds. long-term returns. Have portfolio investing were the family offices and Lengthening the holding period companies told you about a trade-off family businesses a hundred years ago changes the whole incentive scheme of between a social metric and financial who actually cared about their commu- the portfolio management team who performance? nities, did not pollute their backyards, want to work with a private equity and took care of the families of their sponsor. And as I said, the investment Cozzone: All companies face trade-offs companies. Those were good capital- perspective of private equity firms seems between near-term and longer-run prof- ists who drove returns, increased their to have gotten longer. Today, over 60% its—and some make choices to reduce own wealth, but at the same time had a of private equity deals are add-on acqui- near-term profit that can create value really positive impact on those around sitions—which means that PE firms are by reducing investors’ perception of them. And that’s the vision we’re trying now adding to their portfolios. When I risk. Our role as an impact investor is to to go back to. We are proud capital- first worked at First Boston years ago, find business initiatives that create value ists—but believe that there’s a better if I sold a company to a private equity by either increasing profit or reducing way to do business, if we all just do a firm, it was because I had no other risk—and in that sense there is no trade- little bit more work. buyers. off between shareholder value and ESG But the greater capabilities of today’s investment. Let me add that we are better Rehman: So, maybe impact investing’s PE firms have changed that. By adopting able to find and take advantage of such not so new after all. Donna, as a scholar the policies that you talk about, Chris, opportunities because we are not driven of this field, how do you react to Chris’s with all your portfolio companies, they by a quarterly or even a yearly time frame. remarks about trade-offs? can have a very positive impact. In fact, We have a five-year time frame. given the greater size and sophistication As one example, an employee train- ESG, LP Returns, and the Next of GPs today, I think they can have a ing program for one of our portfolio Recession huge positive impact. companies has a short-term cost, but Hitscherich: Like Chris, I think there I was also intrigued by Emily’s the program is expected to provide are trade-offs, but I think the biggest comments about LPs screening out more than adequate returns through one has to do with investors’ holding investment in certain industries. If higher productivity five years down the period returns. In the past, some private private equity firms need the capital line. And the longer one’s investment equity firms exited investments after just but the LPs insist they don’t want to perspective, the fewer trade-offs one three years. And such firms might not invest in certain types of industries, encounters. But I won’t claim that there have been willing to invest in employee then the LPs ought to prevail. The GPs are no trade-offs at all. training programs. And I think taking are there to create returns, but the LPs, That said, good management has a longer-term view, such as five or more the suppliers of capital, can and should always been in significant part about years, is clearly a good thing. I know establish the boundary conditions.

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ood practices can lead to better valuations over time. G And perhaps there’s a new opportunity for private equity to make such an ESG premium a component of value creation— as opposed to just the cost cutting they seemed to be most noted for. – Donna Hitscherich

Rehman: I hear you saying that the favorable, LPs will have more bargain- Hitscherich: Companies like Patagonia supply of capital shapes what GPs do. ing power; they’ll be able to ask for more seem to enjoy premium valuations, and But what does that really mean? And and get it. we would all like to be able to do the what about the possibility of a recession same thing. I agree with Emily, however, that seems to be on people’s minds? Cozzone: I agree with you. We’ve been that limited partners are not able to reviewing various scenarios with every pound their fist and create change right Hitscherich: The LPs have more say than one of our portfolio companies as to away. But good practices can lead to they think in all this. But that said, I how different downturns could affect better valuations over time. And perhaps also think the next recession is going to different stakeholders. But that part of there’s a new opportunity for private be equally unkind to those people who my job now isn’t very different than in equity to make such an ESG premium have ESG and people that don’t have my old job in the more traditional fund. a component of value creation—as ESG. It will be indiscriminate, some- That’s one thing that PE firms do espe- opposed to just the cost cutting they thing like a tornado. We are always cially well—plan for downturns. But seemed to be most noted for. warned against saying, “It’s going to be it’s hard to see signs of a recession in different this time.” But in one respect, today’s high stock prices. It’s also hard Mendell: I suspect there are going to at least, I think things are different. I to see what role ESG factors are playing be more and more “impact” compa- have been surprised at the Fed’s abil- in those prices. nies like Patagonia and that private ity to cut interest rates. In 2007, all equity will begin to take more interest the investment banker presentations Hitscherich: But stock prices are very in these companies. Impact investing is showed all the debt that was coming noisy, and it’s very, very difficult, to now very trendy. Think about all of the due in the next seven years. “It was a extract a pure ESG effect from all that funds today that call themselves “impact mountain of debt,” they all said, “and noise. It is a lot like the difficulty of funds.” Everybody wants to measure the markets can’t possibly absorb this.” trying to isolate and identify the effects impact now; it’s very much the norm. But it did, and PE came out of it stron- of good corporate governance. And there are consulting companies ger than ever. So, interest rates will be that can tell you how to measure impact very important. Cozzone: I agree that trying to isolate across your portfolio. So I expect to see a these effects statistically is extremely lot more discussion about impact, even Mendell: I agree that a recession is going difficult. I have not seen a study showing if it’s not initially the founding princi- to be equally harsh on both companies conclusively that ESG results in better ple of the fund. with ESG and those without ESG, but financial performance. But there’s a great limited partners are expecting that if we paper from Morgan Stanley that shows Cozzone: Impact investing is my bread do go into a recession, capital will be a that although high-ESG and sustainable and butter. I made the shift to this indus- little bit harder to come by. As limited companies don’t distinguish themselves try because I believe this is the trend. partners, we may have more leverage during normal or boom times, such And we’re also seeing an increasing shift with the GP in getting the terms we companies clearly outperform during to consumer-facing companies that are want. As returns start to become less down cycles. getting rewarded more for impacts by

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their customers. Who wouldn’t pay more based on seniority, by position, and even specialists come from a lot of different for a cleaner supply chain or healthier by compensation. places. They can come from sustainabil- products? So LPs are starting to ask questions ity backgrounds, they can come from more commonly during the due environmental analysis backgrounds, The ILPA Plan for Diversity and diligence process, and we’re starting to or they can also come from financial Inclusion see change as a result. The other thing backgrounds. And the ability to apply a Rehman: Emily, let me ask about some- I’ll say is that it’s really important to take financial mindset to some of these risks thing where you personally have deep a positive, not punitive, approach at this that are out there is also a really great expertise, which is diversity and inclu- early stage. Penalizing a general partner skill to bring to any table. sion. Tell us what your members at ILPA because you don’t have enough women And when running a successful think about it, how your work addresses or minorities on your team today is not business, retention and promotion it, and what impact it is having on going to help anybody. We’ve tried to matter a great deal. A lot of folks are private equity and on companies that articulate a view of how GPs and LPs focused on getting the numbers and the are owned by PE funds? can and should work together. The diversity when getting the people in. ILPA Principles is a 40-page document But it’s not going to help if once they’re Mendell: Earlier in this discussion I said that does just that and includes a lot there, they don’t feel like they belong that ESG has gained the most traction of material on both ESG and D&I and don’t feel like they’re a part of the in Europe. But organizations in the throughout. organization. U.S. have really driven the diversity and So we at ILPA are actually working inclusion part of it. I’ve been in venture Hitscherich: I want to back Emily up on two long-term projects—one on ESG capital and private equity since early here. Although I’ve been around a long and one on Diversity and Inclusion. In 2000. And things feel different after time, too, it does feel different this time. both cases, we’re creating a roadmap for the “#Me Too” summer of 2017. Even We here at Columbia Business School limited partners and general partners to ILPA didn’t have a diversity and inclu- do a lot of research on diversity and set their own direction in both of these sion strategy in the summer of 2017, inclusion. And there’s lots of academic spaces. And in the case of diversity and when the Binary Capital scandal and research that suggests that diverse teams inclusion, there is an entire chapter in subsequent stories of harassment within make better decisions. the roadmap devoted to “Retention the VC ecosystem came out in The New and Inclusion.” It recommends setting York Times. Rehman: On the theme of it being up affinity groups within the organiza- But we very quickly realized that the different this time, do you see your tion that address the needs of minorities press would not only ask the portfolio students being more focused on this within the organization. It includes companies and the general partners what than before? recommendations about mentorship and they’re doing to fix this, but they would family leave policy—making sure that ask the LPs as well. Ultimately, the LPs Hitscherich: I think we’re making prog- folks can leave and have a child or care are the critical actors in this because they ress. We just finished our KKR case for an older parent and be able to come have all the money. But because private writing competition on diversity and back to a job and not be penalized for it, equity returns have been so high in recent inclusion. The teams were also rated on both men and women. It’s about promo- years, that influence that LPs hold hasn’t the diversity of their team in terms of tion and making sure that everybody has fully manifested itself yet. thought and experience. We had over an opportunity to be promoted. So there ILPA released our first standard 30 teams of people do the competition, are lots of initiatives that can be taken. due diligence questionnaire in 2013. so it was really quite amazing. So I think In 2018, we added an entire section on the students take it seriously, and I’m Hitscherich: This will all take time. diversity and inclusion that asks compa- starting to see the PE firms take it very When I started as Wall Street as a nies to describe their employee makeup, seriously. banker, senior managers would talk a and the promotion and attrition rates great game, but you didn’t see a lot of for women and minorities. We have a Mendell: Donna’s right about diver- women partners—and that really affects template that allows GPs to list staff sity of thought and perspective. ESG retention. When I went to law school,

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about 30% of law students were women; in the opposite direction. I think we’ll Mendell: I share the other panelists’ but that number is now about 50%. see greater investment returns gener- optimism about the private equity When I went to business school here, ated just by doing that. We can call it industry. I really do believe that the about 20% of students were women— ESG or something else but, ultimately, next generation is going to do better and that’s now about 38%. the companies that perform well will be than we’ve done. ESG is critical. It’s And so it takes time. It’s not just those that treat their people well. I think critical to returns and to value creation, enough to have a great crop of junior we’re in for a great ride. I can’t tell you and it’s critical to saving our planet. It’s people and say, “Okay we’re going how quickly it’s going to happen, but also going to be critical to the PE indus- to bring them up.” Junior people are this has legs. try and the viability of the PE industry naturally skeptical. I always found that, long term. in investment banking, men and women In Closing Big problems still need to be sell differently. When I would pitch Rehman: All right, thanks Donna. Chris overcome, though. The public percep- business to clients with a male managing and Emily, closing thoughts? tion of private equity continues to need director, he’d often try to impose on me work. Some of that negative brand is how he would sell the deal. If you don’t Cozzone: I think the main driver of the deserved. But the only way that private have people like you in the organization, ESG movement is the availability of equity is going to be able to defend itself people sometimes are not evaluating you information. Information is now ubiq- is to walk the talk. I truly believe we are appropriately. uitous, and capitalism is changing as better off with private equity because Talent is multi-faceted so it’s very a result. Supply chains are now much it creates jobs, opportunity, and value. important to have a diverse group. I more transparent. Customer service has But we have to do better, we have to think we’ll get there, but it’s going to to improve because of the “front page of behave better, we have to govern better, take time and everything starts with a The New York Times test” and the “Yelp we have to think about our employees step. And I agree with Emily that this review test.” Prices are transparent. and our people. And within the next time it definitely is different. I think New terms like “ESG impact” are year, private equity is going to be right we’re in an incredibly exciting time. popular but the real challenge is, “How in the middle of the spotlight. ESG is Things feel different this time can we be better capitalists?” Much work one way we can make the case that we because people matter. Much of ESG remains, but the tide is shifting. Anyone really are a valuable contributor to the involves treating our employees and who wants to be in the investing field U.S. economy. So stay tuned, it’s going customers better. I think the time is should have no doubt that this is the side to be an interesting year. ripe for that because society wants it you want to be working on because it is very much after having swung so far where the growth will be.

Journal of Applied Corporate Finance • Volume 32 Number 3 Summer 2020 107 ADVISORY BOARD EDITORIAL Yakov Amihud Carl Ferenbach Donald Lessard Clifford Smith, Jr. Editor-in-Chief High Meadows Foundation Massachusetts Institute of University of Rochester Donald H. Chew, Jr. Technology Mary Barth Kenneth French Charles Smithson Associate Editor Stanford University John McConnell Rutter Associates John L. McCormack Purdue University Amar Bhidé Martin Fridson Laura Starks Design and Production Tufts University Lehmann, Livian, Fridson Robert Merton University of Texas at Austin Mary McBride Advisors LLC Massachusetts Institute of Michael Bradley Technology Erik Stern Assistant Editor Duke University Stuart L. Gillan Stern Value Management Michael E. Chew University of Georgia Gregory V. Milano Richard Brealey Fortuna Advisors LLC G. Bennett Stewart London Business School Richard Greco Institutional Shareholder Filangieri Capital Partners Stewart Myers Services Michael Brennan Massachusetts Institute of University of California, Trevor Harris Technology René Stulz Los Angeles Columbia University The Ohio State University Robert Parrino Robert Bruner Glenn Hubbard University of Texas at Austin Sheridan Titman University of Virginia Columbia University University of Texas at Austin Richard Ruback Charles Calomiris Michael Jensen Alex Triantis Columbia University Harvard University University of Maryland G. William Schwert Christopher Culp Steven Kaplan University of Rochester Laura D’Andrea Tyson Johns Hopkins Institute for University of Chicago University of California, Applied Economics Alan Shapiro Berkeley David Larcker University of Southern Howard Davies Stanford University California Ross Watts Institut d’Études Politiques Massachusetts Institute de Paris Martin Leibowitz Betty Simkins of Technology Morgan Stanley Oklahoma State University Robert Eccles Jerold Zimmerman Harvard Business School University of Rochester

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