Corporate governance

About: Corporate governance is a research topic. Over the lifetime, 118591 publications have been published within this topic receiving 2793582 citations.

Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany

Abstract: Introduction Chapter 1: Innovation, Resource Allocation, and Governance Chapter 2: Transforming the Debates on Corporate Governance Chapter 3: The Foundations of Managerial Control in the United States Chapter 4: The Post-War Evolution of Managerial Control in the United States Chapter 5: Challenges to Post-War Managerial Control in the US Chapter 6: US Corporate Responses to New Challenges Chapter 7: From Managerial to Contested Control in Germany Chapter 8: The Emerging Challenges to Organizational Control in Germany Conclusion

How national systems differ in their constraints on corporate executives: a study of CEO effects in three countries

Abstract: Do CEOs matter more in some countries than in others? Based on a theoretical consideration of three fundamental national-level institutions—national values, prevailing firm ownership structures, and board governance arrangements—we argue that CEOs in different countries face systematically different degrees of constraint on their latitudes of action, and hence they differ in how much effect they have on firm performance. To test these ideas, we apply a variance components analysis methodology to 15-year matched samples of 100 U.S. firms, 100 German firms, and 100 Japanese firms. Results provide strong, robust evidence that the effect of CEOs on firm performance—for good and for ill—is substantially greater in U.S. firms than in German and Japanese firms. Copyright © 2007 John Wiley & Sons, Ltd.

A Survey of Blockholders and Corporate Control

Abstract: 1. INTRODUCTION The notion of diffuse stock ownership is well entrenched among economists. It started with Adam Smith's legendary warning in Wealth of Nations about the "negligence and profusion" that will result when those who manage enterprises are "rather of other people's money than of their own." A century and a half later, another lawyer, Adolf Berle, along with a journalist, Gardiner Means, returned to the theme of diffuse stock ownership. Since the dawn of capitalism, Berle and Means reasoned, most production had taken place in relatively small organizations in which the owners were also the managers. Beginning in the nineteenth century with the Industrial Revolution, however, technological change had increased the optimal size of many firms to the point where no individual, family, or group of managers would have sufficient wealth to own a controlling interest. As a result, enterprises faced "the dissolution of the old atom of ownership into its component parts, control and beneficial ownership" (Berle and Means 1932, p. 8). Ultimately, this separation of ownership from control threatens "the very foundation on which the economic order of the past three centuries has rested." The arguments of Berle and Means on the dangers of diffuse stock ownership, written during the depths of the Great Depression, had an immediate and profound impact. (1) Most notably, their arguments helped to shape the federal securities legislation of the 1930s. That legislation was intended to protect diffuse shareholders from professional managers, and it remains the primary federal securities law to this day. The notion of diffuse ownership has also had a profound influence on contemporary economists. This can perhaps best be seen in one of the pivotal papers of the postwar era, Jensen and Meckling's (1976) agency paper. Much of the focus of that paper is on the conflict between diffuse shareholders and professional managers: Since the relationship between the stockholders and manager of a corporation fit the definition of a pure agency relationship, it should be no surprise to discover that the issues associated with the "separation of ownership and control" in the modern diffuse ownership corporation are intimately associated with the general problem of agency. We show ... that an explanation of why and how the agency costs generated by the corporate form are born leads to a theory of the ownership (or capital) structure of the firm. As economists started to employ this agency perspective, it was mainly in the context of diffuse shareholders and professional managers. This, for example, can be seen in the papers in a special issue of the Journal of Financial Economics on the market for corporate control in 1983. Many of these papers have become widely cited. It is illuminating, however, that among the sixteen papers in the special issue, there is little mention of large-percentage shareholders or managerial stock ownership. (2) In the issue's review article (Jensen and Ruback 1983), stock ownership, be it by mangers or by outsiders, was not listed as a direction for future research. After the volume was published, researchers began to discover that some public corporations had large-percentage shareholders, many of whom were top managers or directors. Researchers also discovered that some of these corporations were large and well known. Concentrated stock ownership, it appeared, was not limited to a few anomalous firms. Soon, academics began to study the impact of large-block shareholders. Three empirical papers in the mid-1980s set the tone and the agenda for much of the research into ownership structure that has ensued over the following fifteen years. Demsetz and Lehn (1985) address the question of the types of public corporations that are likely to have high levels of managerial stock ownership. Holderness and Sheehan (1988) address the question of whether major corporate decisions are different when a corporation has a large-percentage shareholder. …

Governance and sustainability: an investigation into the relationship between corporate governance and corporate sustainability

Abstract: – The purpose of this paper is to show that corporate governance is fundamental to the continuing operation of any corporation; hence much attention has been paid to the procedures of such governance. Similarly sustainability is fundamental to the continuing operation of any corporation, and is arguably the fashionable concept of the moment. While it is clear what is generally meant by corporate governance it is much less clear what is meant by sustainability and the paper starts by investigating this concept., – For two such fundamental concepts however it would seem that there should be a relationship between the two, although little work has been undertaken on exploring this relationship. The central part of this paper is therefore based upon an exploration of the relationship between governance and sustainability, by investigating the FTSE100 companies and their corporate governance policies., – This analysis found some strengths – and hence cause for optimism – and some weaknesses – and hence cause for concern. Areas where further work is needed are identified., – The paper has implications in enhancing the understanding of the necessary components of corporate governance, although it is necessarily limited by the size of the sample., – This paper increases the understanding of the relationship between corporate governance, sustainability and sustainable development.