Journal ArticleDOI
Separation of Ownership and Control
Eugene F. Fama,Michael C. Jensen +1 more
TLDR
In this article, the authors analyze the survival of organizations in which decision agents do not bear a major share of the wealth effects of their decisions and argue that separation of decision and risk bearing functions survives in these organizations in part because of the benefits of specialization of management and risk-bearing but also because of an effective common approach to controlling the implied agency problems.Abstract:
This paper analyzes the survival of organizations in which decision agents do not bear a major share of the wealth effects of their decisions. This is what the literature on large corporations calls separation of ownership and control. Such separation of decision and risk bearing functions is also common to organizations like large professional partnerships, financial mutuals and nonprofits. We contend that separation of decision and risk bearing functions survives in these organizations in part because of the benefits of specialization of management and risk bearing but also because of an effective common approach to controlling the implied agency problems. In particular, the contract structures of all these organizations separate the ratification and monitoring of decisions from the initiation and implementation of the decisions.read more
Citations
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Corporate Governance, Board Diversity, and Firm Value
TL;DR: In this article, the authors examined the relationship between board diversity and firm value for Fortune 1000 firms and found that the proportion of women and minorities on boards increases with firm size and board size, but decreases as the number of insiders increases.
Journal ArticleDOI
Corporate Finance and Corporate Governance
TL;DR: In this article, a combined treatment of corporate finance and corporate governance is proposed, where both debt and equity are treated not mainly as alternative financial instruments, but rather as alternative governance structures.
Journal ArticleDOI
Stakeholder‐agency theory
TL;DR: In this paper, the authors take agency theory and stakeholder theory as points of departure, and propose a paradigm that helps explain the following: (1) certain aspects of a firm's strategic behaviour; (2) the structure of management-stakeholder contracts; (3) the form taken by the institutional structures that monitor and enforce contracts between managers and other stakeholders; and (4) the evolutionary process that shapes both management- stakeholder contracts and the institutional structure that police those contracts.
Journal ArticleDOI
The experience and evolution of trust: Implications for cooperation and teamwork
TL;DR: In this paper, the authors analyze the way that trust evolves in organizations and how it influences cooperation and teamwork, and explore the relationship between trust and an important component of organizational performance and competitive advantage.
Posted Content
Endogeneity and the Dynamics of Internal Corporate Governance
TL;DR: In this paper, the authors use a well-developed dynamic panel GMM estimator to alleviate endogeneity concerns in two aspects of corporate governance research: the effect of board structure on firm performance and the determinants of board structures.
References
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Journal ArticleDOI
Theory of the firm: Managerial behavior, agency costs and ownership structure
TL;DR: In this article, the authors draw on recent progress in the theory of property rights, agency, and finance to develop a theory of ownership structure for the firm, which casts new light on and has implications for a variety of issues in the professional and popular literature.
Journal ArticleDOI
The Theory of Social and Economic Organization
TL;DR: A synthetic polyisoprene rubber latex produced by emulsifying a solution of polyisoperene rubber in an organic solvent with water and removing the solvent from the resulting oil-in-water emulsion is significantly improved with respect to mechanical stability, wet gel strength and dry film strength as mentioned in this paper.
Book
The Modern Corporation and Private Property
TL;DR: Weidenbaum and Jensen as mentioned in this paper reviewed the impact of developments not fully anticipated by Berle and Means, such as the rise of the service sector, and the significant role played by institutional investors in the owner/manager equation.
Journal ArticleDOI
Production, Information Costs, and Economic Organization
Armen A. Alchian,Harold Demsetz +1 more