The paper by Lucian Bebchuk, Alma Cohen, and Allen Ferrell investigates the impact of corporate governance provisions on firm value and stock returns. They focus on the 24 provisions monitored by the Investor Responsibility Research Center (IRRC) and identify six provisions—staggered boards, limits to shareholder bylaw amendments, poison pills, golden parachutes, supermajority requirements for mergers, and charter amendments—that are likely to be most influential. The authors construct an "entrenchment index" (E index) based on these six provisions and find that increases in the E index are monotonically associated with significant reductions in firm valuation and negative abnormal returns during the 1990-2003 period. The other 18 IRRC provisions are not correlated with reduced firm valuation or negative returns. The study suggests that focusing on a small set of key provisions can provide a more accurate measure of corporate governance quality and guide future research and decision-making.The paper by Lucian Bebchuk, Alma Cohen, and Allen Ferrell investigates the impact of corporate governance provisions on firm value and stock returns. They focus on the 24 provisions monitored by the Investor Responsibility Research Center (IRRC) and identify six provisions—staggered boards, limits to shareholder bylaw amendments, poison pills, golden parachutes, supermajority requirements for mergers, and charter amendments—that are likely to be most influential. The authors construct an "entrenchment index" (E index) based on these six provisions and find that increases in the E index are monotonically associated with significant reductions in firm valuation and negative abnormal returns during the 1990-2003 period. The other 18 IRRC provisions are not correlated with reduced firm valuation or negative returns. The study suggests that focusing on a small set of key provisions can provide a more accurate measure of corporate governance quality and guide future research and decision-making.