Varieties of Governance
AbstractThe reform of corporate governance is again on the agenda in the wake of Enron and excessive risk-taking by financial institutions. However, the search for new and better forms of governance often seems to lack guiding principles. A theory of corporate governance ought to emerge from a theory of the firm. Yet the literature shows how this project is both difficult and far from complete. In this paper, we review how existing theory provides a variety of arguments favouring either a shareholder or a stakeholder orientation. These arguments may depend on whether the prime objective for governance is improved current performance or a more long term focus for firms. A brief review of recent US governance reforms is given as a back-drop to discussing more far-reaching proposals that have emerged in the recent literature; a greater role for institutional investors on the one hand or a return to managerial capitalism on the other.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2008041.
Date of creation: 01 Dec 2008
Date of revision:
Corporate; governance; shareholder; stakeholder; innovation;
Other versions of this item:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Social Responsibility
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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