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Corporate governance
About: Corporate governance is a research topic. Over the lifetime, 118591 publications have been published within this topic receiving 2793582 citations.
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TL;DR: A survey and critical review of major current theories on corporate governance can be found in this article, which reveals the inadequacy of conventional approaches employed in corporate governance theorising and calls for a new mode of thinking in analyzing corporate governance.
Abstract: The current debate and theorising on corporate governance has been polarised between a shareholder perspective and a stakeholder perspective. While advocates and supporters of each camp attempt to justify the superiority, rationality and universality of each model in theory, they rarely pay attention to the age-old conceptions, assumptions and presuppositions underpinning their perspectives which are less credible and valid in matching the continually changing practice of corporate governance. This paper serves as a survey and critical review of major current theories on corporate governance. In so doing, it reveals the inadequacy of conventional approaches employed in corporate governance theorising. It calls for a new mode of thinking in analysing corporate governance and concludes by outlining a new direction of research in this field.
425 citations
Book Chapter•
01 Jan 1990
424 citations
TL;DR: In this paper, the authors provided evidence on the role of large shareholders in monitoring company value with respect to a developing and emerging economy, India, whose corporate governance system is a hybrid of the outsider-dominated market based systems of the UK and the US, and the insider-dominated bank-based systems of Germany and Japan.
Abstract: Most of the existing evidence on the effectiveness of large shareholders in corporate governance has been restricted to a handful of developed countries, notably the UK, US, Germany and Japan. This paper provides evidence on the role of large shareholders in monitoring company value with respect to a developing and emerging economy, India, whose corporate governance system is a hybrid of the outsider-dominated market-based systems of the UK and the US, and the insider-dominated bank-based systems of Germany and Japan. The picture of large-shareholder monitoring that emerges from our case study of Indian corporates is a mixed one. Like many of the existing studies, while we find blockholdings by directors to increase company value after a certain level of holdings, we find no evidence that institutional investors, typically mutual funds, are active in governance. We find support for the efficiency of the German/Japanese bank-based model of governance; our results suggest that lending institutions start monitoring the company effectively once they have substantial equity holdings in the company and that this monitoring is reinforced by the extent of debt holdings by these institutions. Our analysis also highlights that foreign equity ownership has a beneficial effect on company value. In general, our analysis supports the view emerging from developed country studies that the identity of large shareholders matters in corporate governance.
424 citations
TL;DR: In this article, the authors construct a firm-level governance index that increases with minority shareholders protection and find that minority shareholders benefit from governance improvements and do so partly at the expense of controlling shareholders.
Abstract: We construct a firm-level governance index that increases with minority shareholder protection. Compared with U.S. matching firms, only 12.68% of foreign firms have a higher index. The value of foreign firms falls as their index decreases relative to the index of matching U.S. firms. Our results suggest that lower country-level investor protection and other country characteristics make it suboptimal for foreign firms to invest as much in governance as U.S. firms do. Overall, we find that minority shareholders benefit from governance improvements and do so partly at the expense of controlling shareholders. (JEL G32, 34, 38) Using the well-known definition from Shleifer and Vishny (1997), governance consists of the mechanisms that ensure minority shareholders receive an appropriate return on their investment. Governance depends on both country-level as well as firm-level mechanisms. The country-level governance mechanisms
423 citations
TL;DR: In this article, the authors examined whether corporate governance mechanisms affect earnings and earnings management at the largest publicly traded bank holding companies in the United States and found that performance, earnings management, and corporate governance are endogenously determined.
423 citations