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AbstractCorporate governance in Canada was examined by looking at the ultimate ownership structure of a large sample of publicly traded firms. Results suggest that small investors in Canada are vulnerable to corporate expropriation in large firms. Despite the similarities in institutional indexes, Canada displays different patterns of ownership structure than sister Anglo‐Saxon countries (the U.S. and the U.K). More importantly, results suggest that excess control drives expropriation over and above the typical Jensen type of agency problems that are attributable to regular separation of ownership and control. Equally important, firms headquartered in Quebec appear to be undervalued vis‐à‐vis firms headquartered in the rest of Canada. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

ABSTRACTResearch Question/IssueWhat is the impact of selective environmental disclosure, also known as greenwashing, on firms' credit risk profiles? Can the superior information and monitoring abilities of private lenders serve as environmental governance mechanisms to promote the adoption of ESG best practices by firms?Research Findings/InsightsThrough detailed examination of private debt contracts and environmental disclosure practices, we reveal that private lenders impose financial penalties on firms with poor environmental records, manifesting as higher spreads and loan‐related fees. Additionally, our analysis demonstrates that greenwashing, or misleading environmental transparency, results in increased debt financing costs for firms. Moreover, lenders may adopt lenient nonprice terms to mitigate the impact of higher loan costs on firms engaged in selective environmental disclosure. This intricate contract design allows lenders to extract appropriate returns without hindering firms' access to external financing.Theoretical/Academic ImplicationsOur findings underscore the significance of private creditors in enhancing environmental disclosure standards within the corporate sphere. Additionally, our evidence emphasizes the importance of integrating firms' environmental impact into theoretical and empirical credit risk models.Practitioner/Policy ImplicationsThe intricate contract structures of bank loans can effectively address the informational risks associated with selective disclosure, without impeding firms' access to external financing. Hence, this financing mechanism holds the potential to enhance the ESG performance of firms.