Varieties of Governance

Ciaran Driver ()

No 2008041, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

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 back-drop 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.

Keywords: Corporate; governance; shareholder; stakeholder; innovation (search for similar items in EconPapers)
JEL-codes: G30 G31 M14 D21 L2 L1 (search for similar items in EconPapers)
Date: 2008-12-01
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Journal Article: Varieties of Governance (2008)
Working Paper: Varieties of governance (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:ctl:louvre:2008041

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