London Business School

Selected publications and articles in my role at London Business School.

 

At the London Business School I work with the Department of Finance and the Leadership Institute to use rigorous research to influence the practice of responsible business.

How should asset owners think about climate change? Universal owner theory suggests they should actively seek to mitigate global warming in order to maximise returns for beneficiaries. In my new paper Universal owners and climate change I unpack this idea and show that it is not as simple as it first appears.

Paying for net zero is the latest collaboration between London Business School and PwC on the topic of linking pay to ESG targets. A follow-up to Paying well by paying for good and Paying for good for all (see below), this study assesses the quality of climate targets in large European companies. Spoiler alert: it’s not great.

During 2021 we collaborated with The Investor Forum to address the question: What does stakeholder capitalism mean for investors? The report considers how investors should prioritise action on stakeholder issues in a way that aligns with client mandates and fiduciary duty.

How do boards and investors think about setting CEO pay? In my study with Alex Edmans of LBS and Dirk Jenter of LSE we surveyed directors of, and investors in, UK companies to find out. They have very different views of the world. You can read a practitioner version here and the full academic paper here, published in the Journal of Financial Economics.

The June 2023 editions of London Business School’s Think magazine contains an article giving a father’s view on gender diversity in the work-place and what we need to focus on to improve working life for our daughters.

Should executive pay be linked to ESG targets? It sounds obvious that it should, but the reality is more complex. In this Think article for London Business School I explain why.

In 2019 our family developed a plan to reduce our carbon footprint by half by 2025. In London Business School’s Think edition on sustainability, I describe how I’ve been getting on.

Paying well by paying for good is a report produced in collaboration with PwC looking at whether executive pay should be linked to ESG targets, and if so how. The follow-up paper Paying for good for all looks at practice and attitudes globally and extends the analysis to consider alignment of broader company-wide reward strategy with ESG.

The Purposeful Company

Selected publications as a Member of The Purposeful Company Steering Committee.

 

The Purposeful Company Executive Remuneration Report, written in conjunction with Professor Alex Edmans of LBS, is the most comprehensive review to date of the academic evidence relevant to the executive pay and corporate governance debate in the UK

The Interim Submission on the UK Corporate Governance Code in 2017 set out a vision for how the Code could be reformed to put purpose and stakeholder orientation at its heart

FRC Review of the Stewardship Code: Thoughts for Change and The Need for an Integrated Regulatory Approach to Stewardship were influential documents produced in 2018 ahead of the Stewardship Code review, outlining a vision for a more ambitious Code and co-ordinated regulation

The Purposeful Company Response to FRC Consultation on Proposed Revision to UK Stewardship Code provided detailed feedback and suggestions on how to create an ambitious Code that would raise the bar for stewardship in the UK

The Purposeful Company Study into Deferred Shares, carried out with the support of HSBC Global Asset Management, is a comprehensive review into simpler deferred share alternatives to LTIPs, covering investor and company attitudes to these arrangements and steps to encourage adoption

The Purposeful Company Progress Report on Deferred Shares, following up on our 2020 study, we assess the progress made in the UK market on adoption of deferred shares and find significant progress has been made, but highlight concerns that a ‘one-size-fits-all’ approach to adoption is limiting reform

The Purpose Tapes - Purpose driven leaders in their own words, interviews with 14 business leaders giving outstanding insights on their motivations for leading with purpose, the opportunities this creates and the challenges they face

PwC

Selected publications as a Partner at PwC.

 

Having been unable to attend in person due to a date change, I was asked to provide detailed written evidence to the Parliamentary Commission on Banking Standards in 2013

I provided written evidence to the BEIS Select Committee inquiries into Corporate Governance following my appearance in 2017 and prior to my appearance in 2018

Making Executive Pay Work – The Psychology of Incentives sets out the conclusions for incentive design arising from a behavioural economics survey study of executives globally

The Ethics of Pay in a Fair Society uses data from an international survey of executives to draw conclusions about attitudes to, and principles of, pay fairness

Executive Pay in a World of Truthiness challenges a number of commonly believed myths about executive pay that are not in fact supported by the academic evidence

Market or Racket explores the arguments and evidence for and against the justifiability of current executive pay levels, and in particular the rate of increase since the 1990s

Paying for Performance shows the importance of correctly analysing data, and in particular including wealth effects, if the link between pay and performance is to be properly assessed

ISS Friend or Foe to Stewardship? builds on US research to explore the extent of the causal impact of ISS on AGM voting outcomes, finding that there is an effect but smaller than commonly believed

What Goes Up Must Come Down created the case in 2014 for a period of continued restraint or decline in executive pay in the UK, which has subsequently come to pass

Time to Listen provides a fact-based assessment of the inequality issue and argues that remuneration committees need to take steps to diffuse the increasingly toxic issue of executive pay

Academic papers and book chapters

References for book chapters and papers on executive pay are given opposite.

In my prior career as a research mathematician at Bath and Cambridge Universities, I published 15 papers in top quality peer review applied physics and mathematics journals. More details are available on request.

 

Gosling, T.J., 2024, ‘Universal Owners and Climate Change’, working paper, available at: https://papers.ssrn.com/abstract=4713536

Edmans, A. E., Gosling, T. J., and Jenter, D., 2023, ‘CEO Compensation: Evidence from the Field’, Journal of Financial Economics, 150(3), available at: https://doi.org/10.1016/j.jfineco.2023.103718

Gosling, T. J. and MacNeil, I., 2023, Can Investors Save the Planet?- NZAMI and Fiduciary Duty, Capital Markets Law Journal, kmad002, available at: https://doi.org/10.1093/ cmlj/kmad002

Gosling, T. J., 2022, ‘Lessons for ESG activists: the case of Sainsbury’s and the living wage’’, J. Appl. Corp. Fin., 35(2), 8-15, available at: https://doi.org/10.1111/ jacf.12550

Gosling, T. J., 2022, ‘Missing the Target: A Review of Mark Roe’s New Book on U.S. Stock-Market Short-Termism’, J. Appl. Corp. Fin., 34(2), 60-64, available at: https://doi.org/10.1111/jacf.12506

PwC and Edmans, A. E., 2019, ‘Share Repurchases, Executive Pay and Investment’, BEIS Research Paper Number 2019/011, available at https://www.gov.uk/government/publications/share- repurchases-executive-pay-and-investment

PwC, Edmans, A. E., and Gosling, T. J., 2021, ‘Executive Pay and Investment in the UK’, BEIS Research Paper Number 2021/007, available at https://www.gov.uk/government/publications/executive-pay- and-investment-in-the-uk

Pepper, A. A., Gosling, T. J., and Gore, J., 2015, ‘Fairness, Envy, Guilt, and Greed – Constraints on the Design of Top-Management Incentives’, Human Relations, 68, 1291-1314.

Gosling, T. J. and Hatter, L., 2017, ‘Risk and Remuneration’, A Practitioner’s Guide to Banking Regulation: Meeting the New Regulatory Landscape, (Thomson Reuters), 191-213

Gosling, T. J., 2012, ‘The Impact of Regulation on Remuneration’, Investing in Change – The Reform of Europe’s Financial Markets, (The Association for Financial Markets in Europe), 65-76

Gosling, T. J., 2011, A Practitioner’s Guide to Basel III and Beyond, (Thomson Reuters), 333-366

Press

I am regularly quoted in the quality press, (e.g. The Financial Times) and have appeared on The Today Programme, Radio 5 Live, BBC News, and Sky News.

 

Some of my OpEds are given below:

Why Pay for Corporate High Flyers is Coming Back to Earth outlined in 2014 the argument that we were entering a period of restraint in executive pay in the UK, which has proven to be the case

Equality in Executive Pay is Not Always Fair argued for a nuanced view of pay differentials and the importance of boards focussing on principles of pay fairness throughout the organisation, which was subsequently reflected in the UK Corporate Governance Code

Fund Industry Can Flush Out the Closet Trackers argued for a change to fee disclosure requirements to show the real cost of closet tracking

How to Give Shareholders a Say on Corporate Social Responsibility argues the case for a say on purpose to give legitimacy to pursuit of responsible business goals that may not directly align with shareholder value

Constant focus on chief executive pay can be counterproductive, argues my letter to the Financial Times, highlighting that CEOs matter and listed companies mustn’t be put at a disadvantage in the market for leadership talent