Chapter 2. Corporate Law And Corporate Governance

2008 ◽  
pp. 28-45
Keyword(s):  
Corporate Governance ◽  
Corporate Law

The effect of the adoption of an alternative corporate governance system on firms’ performances

2016 ◽  
Vol 35 (4) ◽  
pp. 517-529 ◽  
Author(s):  
Carlo Bellavite Pellegrini ◽  
Bruno S. Sergi ◽  
Emiliano Sironi
Keyword(s):  
Corporate Governance ◽  
Propensity Score ◽  
Performance Outcomes ◽  
Corporate Law ◽  
Law Reform ◽  
Governance System ◽  
Content Type ◽  
Alternative System ◽  
The Impact ◽  
Board System

Purpose – Alternative corporate governance systems (CGSs) have attracted a significant bulk of research recently. While the connection between the adoption of an alternative system (one tier board or two tier board system) and firms’ performances has not been fully analysed yet, the purpose of this paper is to analyse whether companies which have turned into an alternative board system have eventually improved their performance over time. Design/methodology/approach – Using a sample of more than 15,000 Italian unlisted joint stock companies, the authors compare performance outcomes in 2009 of firms adopting alternative systems with performances of firms that maintained the system in force before the 2003 Corporate Law Reform (defined as “traditional”). Because of the choice of an alternative system (one tier or two tier board) instead of a traditional one is not random, the authors reduce selection bias implementing matching methods and comparing firms that are close in terms of propensity score measured in 2003 (the year before the new CGSs have been introduced by a corporate law reform). Findings – The authors do not find evidence of a significant improvement of performances in 2009 concerning those firms that have adopted a one tier or two tier board systems with respect to those which maintained a traditional one. Originality/value – The novelty of the study concerns the application of propensity score matching for the evaluation of the impact of the change of the CGS that is possible in presence of two conditions that are all verified in our setting: first, to have a country where corporate law allows for choosing among different systems; in this case Italy is a good laboratory, because it allows for the choice among three different systems; and second, to have the opportunity to evaluate the effect of the change in light of a relatively recent “pre-treatment” condition; this is made possible by the fact that before the 2003 Reform of corporate law all the companies had a traditional system.

On Social Psychology, Business Ethics, and Corporate Governance

2000 ◽  
Vol 10 (3) ◽  
pp. 725-733 ◽  
Author(s):  
Timothy L. Fort
Keyword(s):  
Social Psychology ◽  
Corporate Governance ◽  
Business Ethics ◽  
Virtue Ethics ◽  
Corporate Law ◽  
Human Beings ◽  
Ethical Business ◽  
Large Numbers ◽  
Large Corporations ◽  
Business Behavior

Abstract:This paper is a response to a recent colloquy among Professors David Messick, Donna Wold, and Edwin Harman. I defend Messick’s naturalist methodology, which suggests that people inherently categorize others and act altruistically toward certain people in a given person’s in-group. This paper suggests that an anthropological reason for this grouping tendency is a limited human neural ability to process large numbers of relationships. But because human beings also have the ability to modify, to some extent, their nature, corporate law can organize small mediating institutions within large corporations in order to take ethical advantage of this grouping tendency. Within a corporate law taking seriously a mediating institution’s formulation of business communities, a virtue ethics approach can be integrated with a naturalist approach in a way that fosters ethical business behavior while mitigating the dangers of ingrouping tendencies.

scholarly journals From Corporate Law to Corporate Governance

2016 ◽  
Author(s):  
Ronald J. Gilson
Keyword(s):  
Corporate Governance ◽  
Theory Of The Firm ◽  
Corporate Law ◽  
Law And Finance ◽  
Corporate Behavior ◽  
Governance Analysis ◽  
Path Dependent ◽  
1960S And 1970S ◽  
The 1960S ◽  
Traditional Approaches

In the 1960s and 1970s, corporate law and finance scholars gave up on their traditional approaches. Corporate law had become “towering skyscrapers of rusted girders, internally welded together and containing nothing but wind.” In finance, the theory of the firm was recognized as an “empty box.” This essay tracks how corporate law was reborn as corporate governance through three examples of how we have usefully complicated the inquiry into corporate behavior. Part I frames the first complication, defining governance broadly as the company’s operating system, a braided framework of legal and non-legal elements. Part II adds a second complication by making the inquiry dynamic: corporate governance as a path dependent process that co-evolves with the elements of the broader capitalist regime. Part III considers unsuccessful efforts to simplify rather than complicate corporate governance analysis through static single factor models: stakeholder, team production, director primacy, and shareholder primacy. Part IV concludes by highlighting the tradeoff between a governance system’s capacity to adapt to change and its ability to support long-term investment.

Are Rawlsian Considerations of Corporate Governance Illiberal? A Reply to Singer

2016 ◽  
Vol 26 (3) ◽  
pp. 407-421 ◽  
Author(s):  
Sandrine Blanc
Keyword(s):  
Corporate Governance ◽  
Political Liberalism ◽  
Basic Structure ◽  
Corporate Law ◽  
Economic Organizations ◽  
Political Conception

ABSTRACT:Singer has recently argued that questions related to corporate governance are beyond the reach of Rawls’s political conception of justice. This is because justice applies to the basic structure of society, understood as society’s legally coercive structures, and because corporate governance cannot be considered part of this structure in political liberalism. This commentary challenges the second part of the argument. First, it suggests that the criterion used to exclude corporate governance from the basic structure—whether employees can exit economic organizations—is not conclusive for corporate governance, notably as institutionalized in corporate law. Second, even if the focus were on corporate governance, it would still be possible to argue that it legally coerces citizens, if not employees, in a relevant way. Thus, the argument is not successful in demonstrating that political liberalism goes beyond its legitimate boundaries when considering that aspects of corporate governance may be matters of justice.

Culture and Law in Corporate Governance

2015 ◽  
Author(s):  
Amir N. Licht
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Cultural Analysis ◽  
Corporate Law ◽  
Cultural Dimensions ◽  
Dividend Distribution ◽  
The Board Of Directors ◽  
Research Findings ◽  
Corporate Social ◽  
The Relationship

This chapter explores the relationship between culture and law, especially corporate law, and its implications for corporate governance. It begins with an overview of the basic concepts in cultural analysis as well as prevalent theories of cultural dimensions and of social networks as social capital. It then summarizes research findings regarding the consequences of culture for corporate governance on issues ranging from executive compensation to legal transplants and the objectives of the corporation (corporate social responsibility). It also discusses relations with investors and other stakeholders by way of disclosure and dividend distribution, along with the operation, composition, and network structure of the board of directors. Finally, the chapter considers how the relationship between culture and law affects diversity and persistence in corporate governance.

Empirical Studies of Corporate Law and Governance

2017 ◽  
Author(s):  
Michael Klausner
Keyword(s):  
Corporate Governance ◽  
Empirical Studies ◽  
The United States ◽  
Corporate Law ◽  
Empirical Literature ◽  
Related Literature ◽  
Takeover Defenses ◽  
The Us ◽  
Governance Quality ◽  
The Impact

This chapter examines the empirical literature on corporate law and governance in the United States. Four areas of the US corporate governance literature are discussed: (i) state competition to produce corporate law, (ii) independent boards, (iii) takeover defenses, and (iv) the use of corporate governance indices. The chapter concludes that these areas of research reflect varying degrees of success. The literature on state competition has been a major success. We know much more in this area as a result of empirical analysis in this area than we did on the basis of theory alone. At the other extreme is the literature on takeover defenses and the related literature that uses governance indices as measures of governance quality. Those empirical literatures are plagued by misunderstandings of how takeovers and takeover defenses work, and many results are therefore not as informative as they appear to be. In between is the literature on the impact of an independent board. Here, empiricists faced perhaps insurmountable challenges in proving causation, but nonetheless exposed informative associations.

A Behavioral Perspective on Corporate Law and Corporate Governance

2015 ◽  
Author(s):  
Jaap Winter
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Board Of Directors ◽  
Corporate Law ◽  
The Core ◽  
Compensation Systems ◽  
The Board Of Directors ◽  
Performance Based Pay ◽  
Rule Making ◽  
Behavioral Perspective

This chapter examines corporate law and governance from a behavioral perspective. It begins with an overview of the growing body of behavioral knowledge and its impact on the core assumptions of the agency theory. It then goes on to consider a number of specific areas of corporate law and governance where behavioral perspectives are particularly relevant, with particular emphasis on rule making. The chapter also explores how the board of directors performs, along with modern executive compensation systems, often in the form of performance-based pay. Finally, the chapter turns to the interaction between executives, non-executives, and (institutional) investors in corporate governance.

Reforming German Corporate Governance: Inside a Law Making Process of a Very New Nature Interview with Professor Dr. Theodor Baums

2001 ◽  
Vol 2 (12) ◽  
Author(s):  
Theodor Baums
Keyword(s):  
Corporate Governance ◽  
Capital Market ◽  
Insurance Industry ◽  
German Law ◽  
Corporate Law ◽  
Corporate Management ◽  
Future Prospects ◽  
The Public ◽  
Depth Analysis ◽  
The University

Just over a year ago, in the Spring of 2000, a Government Commission entitled \“Corporate Governance - Unternehmensführung (corporate management) - Unternehmenskontrolle (corporate control) - Modernisierung des Aktienrechts (Modernization of corporate law) and consisting of a group of selected lawyers and business practioners from the banking and insurance industry, took up the task of engaging in an in-depth analysis of the structure and challenges of \“German corporate governance.\” The Commission\'s work has drawn to an end and its 300 page report was presented to the public on July 10, 2001. It is German Law Journal\'s privilege to provide its readers with the first-hand insights of the Chair of the Commission, Professor Theodor Baums of the University of Frankfurt\'s Institute of Banking Law. In his discussion with GLJ, Professor Baums addressed specifics of the Commission\'s Report as well as the heritage of and the future prospects for German corporate and capital market law.

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