Misère de la corporate governance
French business law has been deeply influenced by the theory of ?Corporate Governance? since the middle of the Nineties. Among others, Marc Viénot and Daniel Bouton?s reports supported innovations, such as principles of transparency and of compliance, and institutions acting as independent administrators. Guidelines and codes of governance are now implemented by most listed companies. The Parliament passed several acts which oblige such companies to comply with corporate governance standards : Law on new economic regulation, financial security law, etc. Last but not least, the French subsidiaries of American publicly listed companies have to comply with the provisions of the Sarbanes Oxley Act providing for a ?whistleblowing? procedure. All in all, corporate governance is the main inspiration of the French business law since the beginning of the century. Ten years after, does corporate governance work ? Has economic regulation improved ? Are companies managers under tighter control ? Did scandals and financial crisis disappear ? The answer is clearly negative. If we consider business life from a microeconomic point of view, in spite of all legal and voluntary provisions implemented by companies in accordance with corporate governance theory, such cases as Refco in the US or Société Générale in France are obvious examples of internal control failures. Corporate governance mechanisms do not provide managerial transparency nor financial security. From a macroeconomic point of view, they did not prevent the banks from taking foolish risks in giving estate credit to obviously insolvent borrowers. Beyond economic inefficiency, corporate governance rules weaken the business law because they are narrowly focused on the principal agent relationship and ignore the non financial scope of the firm. In this paper, we argue that some of the most important corporate governance mechanisms (such as independent administrator, managerial incentives, whistleblowing) do not fit with major principles and equilibria of French law. We suggest that we should get over with so poor a model as is provided by the principal agent theory, and instead consider the firm as a complex socio-economic cell.
Volume (Year): t. XXII, 4 (2008)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.cairn.info/revue-internationale-de-droit-economique.htm|
When requesting a correction, please mention this item's handle: RePEc:cai:riddbu:ride_224_0407. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.