Varieties of governance

Driver, Ciaran (2007): Varieties of governance. Published in: Louvain Economic Review , Vol. 74, No. 4 (October 2008): pp. 425-453.

Abstract

The reform of corporate governance is again on the agenda in the wake of Enron and excessive risk-taking by financial institutions. However, the search for new and better forms of governance often seems to lack guiding principles. A theory of corporate governance ought to emerge from a theory of the firm. Yet, the literature shows how this project is both difficult and far from complete. In this paper we review how existing theory provides a variety of arguments favouring either a shareholder or a stakeholder orientation. These arguments may depend on whether the prime objective for governance is improved current performance or a more long-term focus for firms. A brief review of recent US governance reforms is given as a backdrop to discussing more far-reaching proposals that have emerged in the recent literature; a greater role for institutional investors on the one hand or a return to managerial capitalism on the other.

• Item Type: MPRA Paper
• Language: English
• Keywords: CORPORATE_GOVERNANCE SHAREHOLDER STAKEHOLDER INNOVATION
• Subjects: D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, Operations, and Impact; G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General

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