Corporate governance, firm value and risk: Past, present, and future

This paper, which serves as the lead article for this special issue of the Pacific-Basin Finance Journal published in conjunction with the 5th FMCG Conference 2014, reviews and comments on the current state of and potential for future research on the linkage between corporate governance and risk. The corporate governance-risk nexus is founded on the fundamental premise that corporate governance regulation primarily aims at curbing opportunistic managerial behavior and excessive risk taking. Accordingly, we discuss the key work on managerial risk taking, idiosyncratic risk, information risk, accounting opacity, executive compensation, directors and shareholder activism and finally governance, risk and value creation in a way that gives strong hints on possible future research directions across this broad academic landscape. Such coverage dovetails nicely with the special issue content featuring twenty one papers on the theme "Governance and Risk". As such, our paper naturally concludes with a brief roadmap of the papers published within.