Corporate governance myths: Comments on Armstrong, Guay, and Weber

James A. Brickley and Jerold L. Zimmerman

Journal of Accounting and Economics, 2010, vol. 50, issue 2-3, 235-245

Abstract: This paper argues that academics, politicians, and the media have six commonly held but misguided beliefs about corporate governance. While Armstrong et al. (2010) discuss some of these misconceptions, a wider recognition that these beliefs are actually "myths" is important. They include: (1) a common definition of "corporate governance" exists; (2) a useful distinction is "internal" versus "external" governance mechanisms; (3) outside directors perform two separable roles: to advise and monitor managers; (4) research has identified "good" and "bad" governance practices; (5) a "good" governance index can be constructed; and (6) corporate governance "best practices" can be deduced from peer data.

Keywords: Corporate; governance; Financial; accounting; Agency; costs; Contracting; Debt; contracts (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (84)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:50:y:2010:i:2-3:p:235-245

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