Corporate Governance in a Public Sector Context. A study of governance processes in jointly owned municipal companies
AbstractAccording to agency theory owners need to exert control over their companies in order to secure that their interests are protected. The results presented in this paper contradicts agency theory and instead shows how too much control can be contra productive. The purpose of the paper is to study the governance process in jointly owned municipal companies in order to analyse how divergent interests are managed. To accomplish that, two case studied of jointly owned municipal companies in Sweden have been conducted. The analysis of the cases shows how the various interests of the owners complicate not only the governance process, but also the situation for the managing director. Based on the two cases studied factors influencing the governance process have been identified and a discussion is made in regards to how the owners, the board of directors and the managing director can act in order to reduce the complexity. Here trust and communication has been identified as being two important factors when it comes to reduce the complexity and enable the managing director to respond to the needs of all owners.
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Bibliographic InfoPaper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2010-37.
Date of creation: 22 Nov 2010
Date of revision:
Corporate governance; municipal company; stewardship theory; agency theory; joint ownership;
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