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 backdrop 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 University Library of Munich, Germany in its series MPRA Paper with number 18398.
Date of creation: 15 Nov 2007
Date of revision: 30 Jun 2008
Publication status: Published in Louvain Economic Review 4.74(2008): pp. 425-453
CORPORATE_GOVERNANCE SHAREHOLDER STAKEHOLDER INNOVATION;
Other versions of this item:
- Ciaran DRIVER, 2008. "Varieties of Governance," Discussion Papers (REL - Recherches Economiques de Louvain) 2008041, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
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