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Corporate Governance in a Public Sector Context. A study of governance processes in jointly owned municipal companies





According 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.

Suggested Citation

  • Anna THOMASSON, 2010. "Corporate Governance in a Public Sector Context. A study of governance processes in jointly owned municipal companies," Departmental Working Papers 2010-37, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2010-37

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    Cited by:

    1. Andrea ZATTI, 2012. "New Organizational Models In European Local Public Transport: From Myth To Reality," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 83(4), pages 533-559, December.
    2. Andrea ZATTI, 2011. "Organizational models in European local public transport: is the new paradigm really dominant," Departmental Working Papers 2011-29, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

    More about this item


    Corporate governance; municipal company; stewardship theory; agency theory; joint ownership;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation


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