Varieties of Governance

Driver, Ciaran

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.

Citation

Driver, C. (2008). Varieties of Governance. Recherches économiques de Louvain (Imprimé), 74, 425-453

• Journal Article Type: Article
• Publication Date: Jan 1, 2008
• Deposit Date: Oct 22, 2010
• Print ISSN: 0770-4518
• Electronic ISSN: 1782-1495
• Peer Reviewed: Peer Reviewed
• Volume: 74
• Pages: 425-453