Varieties of Governance

Ciaran Driver

Recherches économiques de Louvain, 2008, vol. 74, issue 4, 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. JEL Codes ? G30, G31, M14, D21, L2, L1.

Keywords: corporate; governance; shareholder; stakeholder; innovation (search for similar items in EconPapers)
JEL-codes: D21 G30 G31 L1 L2 M14 (search for similar items in EconPapers)
Date: 2008
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