Topic
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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Posted Content•
TL;DR: A discussion forum based around Thomas Piketty's book, Capital in the twenty-first century, with a number of economists from academia, public sector bodies and private sector institutions was held at the Centre for Economic Policy Research and the Bank of England.
Abstract: On 19 December 2014, the Centre for Economic Policy Research and the Bank of England hosted a discussion forum based around Thomas Piketty’s book, Capital in the twenty-first century, with a number of economists from academia, public sector bodies and private sector institutions. Four speakers presented research on various issues relating to inequality, including: access to education; wealth and taxation policy; and the role of governance and institutions. This article presents each speaker’s key arguments, and includes a summary of the open-floor debate that followed.
1,286 citations
Journal Article•
TL;DR: In this article, the authors conduct a large-scale, long-horizon study of whether the degree of board independence correlates with various measures of the long-term performance of large American firms.
Abstract: The boards of directors of American public companies are dominated by independent directors. Many commentators and institutional investors believe that a "monitoring board," composed almost entirely of independent directors, is an important component of good corporate governance. The empirical evidence reported in this Article challenges that conventional wisdom. We conduct the first large-sample, long-horizon study of whether the degree of board independence (proxied by the fraction of independent directors minus the fraction of inside directors on a company's board) correlates with various measures of the longterm performance of large American firms. We find evidence that low-profitability firms increase the independence of their boards of directors. But there is no evidence that this strategy works. Firms with more independent boards do not perform better than other firms. Our results support efforts by firms to experiment with board structures that depart from the conventional monitoring board. I. INTRODUCTION Over the last thirty years, American corporate boards have undergone a gradual but dramatic change. In the 1960s, most had a majority of inside directors. Today, almost all have a majority (usually a large majority) of outside directors, most have a majority (often a large majority) of independent directors, and an increasing number have only one or two inside directors. This pattern reflects the conventional wisdom that the board's principal task is to monitor management, and only independent directors can be effective monitors. In contrast, an insider-dominated board is seen as a device for management entrenchment.1 For example, guidelines adopted by the Council of Institutional Investors call for at least 2/3 of a company's directors to be independent; guidelines adopted by the California Public Employees Retirement System and by the National Association of Corporate Directors call for boards to have a "substantial majority" of independent directors.2 American corporate governance experts and institutional investors are now exporting this conventional wisdom around the world. It has only an occasional dissenting voice.3 Even the Business Roundtable (an organization of large-firm CEOs), which once opposed proposals for more independent boards, now recommends that boards have a "substantial majority" of independent directors.4 Yet there are numerous anecdotes where a highly independent board hasn't prevented large-scale wealth destruction. Enron (with eleven independent directors on its fourteen-member board) is only the most recent example. When we turn from anecdote to quantitative evidence, the conventional wisdom favoring highly independent boards lacks a solid empirical foundation, in this or other studies. We study in this Article three related questions. First, does greater board independence produce better corporate performance, as conventional wisdom predicts? Second, and conversely, does board composition respond to firm performance? Third, does board size predict firm performance? Prior quantitative research on the first two questions has been inconclusive; for the third, two studies report that firms with large boards perform worse than firms with smaller boards. We report here evidence from the first large-scale, long-time-horizon study of the relationship among board independence, board size, and the long-term performance of large American firms. We study measures of financial performance and growth from 1985-1995 for 934 of the largest United States firms, using data on these firms' boards of directors in early 1991 and board data for a random subsample of 205 firms from early 1988. Our principal findings: We find evidence that low-profitability firms respond to their business troubles by following conventional wisdom and increasing the proportion of independent directors on their boards. There is no evidence, however, that this strategy works. …
1,283 citations
TL;DR: In this article, a behavioral agency model of executive risk-taking is presented, which suggests that executive risk taking varies across and within different forms of monitoring and that agents may exhibit risk-seeking as well as risk-averse behaviors.
Abstract: Building on agency and prospect theory views, we construct, in this article, a behavioral agency model of executive risk taking. In the model we combine elements of internal corporate governance with problem framing to explain executive risk-taking behavior. The model suggests that executive risk taking varies across and within different forms of monitoring and that agents may exhibit risk-seeking as well as risk-averse behaviors. We develop specific propositions that combine monitoring with performance and the framing of strategic problems to explain executive choices of strategic risk. The resulting propositions enhance and extend the agency-based corporate governance literature on executive risk taking.
1,281 citations
TL;DR: This article reviewed and synthesized recent research from strategy, finance, and economics on principal-principal conflicts with an emphasis on their institutional antecedents and organizational consequences, and provided a foundation upon which future research can continue to build.
Abstract: Instead of traditional principal–agent conflicts espoused in most research dealing with developed economies, principal–principal conflicts have been identified as a major concern of corporate governance in emerging economies. Principal–principal conflicts between controlling shareholders and minority shareholders result from concentrated ownership, extensive family ownership and control, business group structures, and weak legal protection of minority shareholders. Such principal–principal conflicts alter the dynamics of the corporate governance process and, in turn, require remedies different from those that deal with principal–agent conflicts. This article reviews and synthesizes recent research from strategy, finance, and economics on principal–principal conflicts with an emphasis on their institutional antecedents and organizational consequences. The resulting integration provides a foundation upon which future research can continue to build.
1,280 citations
Book•
14 Apr 1993
TL;DR: Kooiman et al. as mentioned in this paper proposed a model for the management of public-private cooperation dynamics and room for manoeuvre in social-political governance, using complexity, dynamics and diversity.
Abstract: Social-Political Governance - Jan Kooiman Introduction PART ONE: CONCEPTUALIZATIONS Governing Failures and the Problem of Governability - Renate Mayntz Some Comments on a Theoretical Paradigm Modes of Governance - Andrew Dunsire Governance and Governability - Jan Kooiman Using Complexity, Dynamics and Diversity PART TWO: PREDICAMENTS Lost Opportunity - Fr[ac]ed[ac]eric Royall The Case of Labour Market Management in the Republic of Ireland Public Policy Planning and the Problem of Governance - Kirsti Stenvall The Question of Education in Finland Women's Emancipation as a Question of Governance - Marijke Prins Actors, Institutions and the Room for Manoeuvre PART THREE: EXPERIENCES The Governance of Data Protection - Charles Raab Environmental Regulation of Business - Martijn van Vliet Options and Constraints for Communicative Governance Public-Private Partnership - Vincent Kouwenhoven A Model for the Management of Public-Private Cooperation Dynamics and Room for Manoeuvre in Governance - Mich[gr]ele Breuillard The Channel Tunnel Decision in France and Britain Governance between Legitimacy and Efficiency - Geert Bouckaert Citizen Participation in the Belgian Fire Services Governance in Interaction - Herman Aquina and Hans Bekke Public Tasks and Private Organisations PART FOUR: PROSPECTS FOR REFORM Public Management from Imitation to Innovation - Les Metcalfe Complexity, Governance and Dynamics - Walter Kickert Conceptual Explorations of Public Network Management Governance and the Problem of Representation in Public Administration - Ky[um]osti Pekonen The Case of Finland Modes of Governance and Administrative Change - Torben Beck J[/]orgensen PART FIVE: EVALUATIONS The Governance of Education - Roger Duclaud-Williams Britain and France Findings, Speculations and Recommendations - Jan Kooiman
1,280 citations