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Theory Of Corporate Governance Essay

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Theories of Corporate Governance The philosophical foundations of corporate governance Edited by Thomas Clarke Contents Preface Acknowledgements ‘Introduction: Theories of Governance – Reconceptualizing Corporate Governance Theory After the Enron Experience’ Thomas Clarke PART 1 ECONOMIC FOUNDATIONS ix xi 1 31 34 45 ‘The Managerial Revolution in American Business’ Alfred D. Chandler Jr ‘The Impact of the Corporation on Classical Economic Theory’ Adolf A. Berle PART 2 AGENCY THEORY 55 58 64 78 ‘Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure’ Michael C. Jensen and William H. Meckling ‘Separation of Ownership and Control’ Eugene F. Fama and Michael C. Jensen ‘Agency Theory: An …show more content…

One feature of its complexity is that companies combine economic and social roles. Insights from the social sciences, therefore, have their place alongside those from economics. Governance structures are important, in the sense that they have to be clear and understood to be effective, but their precise forms are less so. What matters in practice is the way in which individuals put these structures to work, so people, their selection and their motives count. Another feature of complexity is the diversity of governance systems and processes around the world. Forms of corporate governance are shaped nationally by their economic, political and legal backgrounds, by their sources of finance, and by the history and culture of the countries concerned. Beyond all this, we are studying a process in motion and the practice of corporate governance has developed dramatically in the last two decades. The pace has been set by the introduction of governance codes, first nationally and then internationally. These codes have usually been drawn up in reaction to events and have been composed by practitioners, pressed for time and responding to immediate political and public concerns. Ideally, we would call a halt to codes, laws and regulations in this field to give time for theory to catch up with practical experience and illuminate it. This is a vain hope, but at least this book provides access to the relevant writings

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