Corporate Governance Mechanisms in light of the COVID‐19 Crisis: How Financial Information and Regulation, Managerial Decision‐Making, and Policy Intervention Can Shape the Economic Recovery

• DOI: http://doi.org/10.1111/corg.12364
• Date: 01 January 2021
• Published date: 01 January 2021

Call for Papers

Corporate Governance: An International Review

Special Issue on

“Corporate Governance Mechanisms in light of the COVID-19 Crisis: How Fi-

nancial Information and Regulation, Managerial Decision-Making, and Policy

Intervention Can Shape the Economic Recovery”

Submission Deadline: August 1, 2021

Guest Editors

Amedeo Pugliese, Universitat Pompeu Fabra, Spain & University of Padua, Italy

Massimiliano Bonacchi, Free University of Bozen-Bolzano, Italy

Christine Botosan, Financial Accounting Standard Board, USA

Dhananjay Nanda, University of Miami, USA

BACKGROUND

The Covid-19 global pandemic has been extraordinarily disruptive with dramatic

health-related effects in terms of the death toll, number of affected patients and world-

wide negative economic consequences including significant job losses, corporate

bankruptcies, and a global recession of about 3% of the GDP (IMF, 2020). Although

prolonged halts to companies’ production facilities surely threaten their ability to sur-

vive, the severity of the loss companies face due to the disruption to their activities is

not yet fully understood. There is little doubt that in the aftermath of the crisis, however,

many companies and organizations will be the ‘patients’ to be treated. Whether the

relief mechanisms implemented by governments worldwide and companies’ re-

sponses will be effective is currently unknown. The magnitude of the public health and

economic consequences at stake and the related uncertainty shall call many research-

ers to action.

Visible signs of the downturn will feature in the financial statements of entities world-

wide – private and public, large and small, for-profit and not-for-profit or governmental.

The revenue shortfalls will severely depress net income and book value of equity and

create pressure for short-term liquidity. In addition, current accounting standards may

lead to subjective non-cash charges due to impairments of goodwill, inventory, and

other assets and remeasurement of items measured at fair value, thus further decreas-

ing net income and equity. Decreases in equity below a certain threshold will trigger

debt-covenants violations, and in some countries, shall impose a bankruptcy filing.

Investors’ ability to assess future cash flows and entity value and auditors’ ability to

monitor reported amounts are challenged in this environment. The ongoing uncertainty

is spurring different behaviors and responses by various economic actors. Therefore,

we see the following questions as being particularly relevant and timely from an em-

pirical standpoint:

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