Media or Corporations? Social Media Governance Between Public and Commercial Rationales

In public discussions of social media governance, corporations such as Google, Facebook, and Twitter are often first and foremost seen as providers of information and as media. However, social media companies’ business models aim to generate income by attracting a large, growing, and active user base and by collecting and monetising personal data. This has generated concerns with respect to hate speech, disinformation, and privacy. Over time, there has been a trend away from industry self-regulation towards a strengthening of national-level and European Union-level regulations, that is, from soft to hard law. Hence, moving beyond general corporate governance codes, governments are imposing more targeted regulations that recognise these firms’ profound societal importance and wide-reaching influence. The chapter reviews these developments, highlighting the tension between companies’ commercial and public rationales, critiques the current industry-specific regulatory framework, and raises potential policy alternatives.

Public Corporate Governance

In light of the relevance of state-owned enterprises (SOEs) for society and the serious governance challenges facing them, public corporate governance (PCG) is a crucial issue for scholars and practitioners. PCG can be defined as the legal and factual regulatory framework for control, supervision, and management of public organisations with independent economic management. This chapter outlines the basic concepts of PCG, major PCG challenges, and the potential and diffusion of public corporate governance codes. Furthermore, it shows the need for more empirical research and research perspectives for the PCG field to contribute to policy-making.

The Governance of International Organisations

International organisations (IOs) are central players in the architecture of global governance—from international peace and security to global economic governance, humanitarian assistance, and sustainable development. They draw on their expertise and the legitimacy they derive from their global or regional representativeness to facilitate international cooperation to address collective challenges. In this chapter, we examine the means and mechanisms through which IOs are governed. We begin with an introduction to IOs, focusing on the three foundational bodies that constitute the governance components of most IOs: member states, secretariats, and executive boards. We examine oversight and accountability mechanisms and consider four governance design features that vary across IOs: their mandate, financing, decision-making, and engagement with non-state actors. Finally, we reflect on some of the contemporary governance challenges IOs face today and describe different ways they are adapting and reforming to address some of the challenges.

Corporate Governance Regulation for Public Benefit Foundations in Europe

This chapter seeks to answer whether corporate governance principles apply to public benefit foundations, taking into account the specific structure of philanthropic foundations as asset-based and purpose-driven organisations without owners and shareholders, and, if so, in which ways? In search of a response, the chapter reviews internal and external governance rules of public benefit foundations as tools to safeguard the will of the founder(s) and pursuit of the statutory public benefit purpose in a comparative perspective and places them in the context of recent policy. The chapter concludes that classical corporate governance theory, including principal–agent theory, is not suitable for public benefit foundations and more comprehensive principles should be further developed and tested. It also suggests that the interplay of hard law and soft law as well as internal and external governance elements seems necessary to provide appropriate governance approaches.

Corporate Governance: What Are the Issues?

Traditionally, corporate governance is about agency problems caused by the division of ownership and control. This chapter moves beyond this understanding. Starting with a theoretical overview, the chapter reviews different approaches to corporate governance and discusses shareholder primacy in light of the increasing demand for corporate social responsibility. Afterwards, a brief history of the development of corporate governance codes is given, followed by the role of corporate governance during the global financial crisis. Different corporate governance mechanisms, such as independent directors, board composition, and member diversity, as well as executive remuneration are subsequently discussed. Problems specific to corporate governance of technology companies are also highlighted, as well as the lessons Germany’s co-determination law can teach for the understanding of board diversity. The chapter concludes with a brief reflection on shareholder primacy, a diversifying corporate world, and the future of corporate governance codes.

Corporate Governance in Comparative Perspective

In a broad sense, corporate governance describes the mechanisms, relations, and processes through which the interests of a corporation’s stakeholders are balanced. Yet, corporate governance is not limited to companies but can be found in international organisations, philanthropic foundations, and social enterprises, among other organisational forms. This chapter outlines the volume’s comparative approach that highlights the diversity of corporate governance across different forms and fields. Starting with the financial crisis, the chapter discusses the legal foundation of corporate governance regimes and introduces the relevant laws and codes as well as prominent indicators to measure the quality of governance in corporations. Afterwards, the book’s chapters are briefly introduced and connected to the volume’s overarching interest.

Behavioural Economics, Neuroeconomics, and Corporate Law

Behavioural economics is an established field. Still it carries the premises that the actions of corporate players are only to a minor degree led by self-interest, rationality, and self-discipline. Bias portrayed throughout behavioural economics offers an alternative to rational-theoretical standard theory as it allows predictions about the systematic deviation from the prognosis of the homo economicus’ actions. The reception of the findings of systematic research on the basis of human behaviour in modern psychology, neurology, or behavioural economics in corporate and capital market law enables its continuing development. The intention is to assume that non-legal arguments, complying with the standard of their respective scientific field, can be adopted for the development of corporate law. Therefore, the core of the chapter addresses the question of how the development of corporate law will occur under the consideration of findings from adjacent research fields such as behavioural economics.

Governance in Social Enterprises

Social enterprises—organisations that pursue a social mission using market mechanisms—are promising vehicles to create both social and economic value for society. Navigating and/or aligning multiple goals and interests of stakeholders is critical for them to avoid mission drift, i.e. losing sight of their social mission, while navigating market and political pressures. Governance has been identified as a key mechanism that helps social enterprises to thrive as hybrid organisations, fulfilling multiple goals and attending to demands of multiple stakeholders. In this chapter, we review canonical theoretical approaches on corporate governance and assess their usefulness to understand governance of social enterprises. We highlight productive angles to examine social enterprise governance and provide first empirical insights on how social enterprises are governed in order to inform future research in this domain.

Listed Companies

Although corporate governance codes have spread across the European Union and beyond, and are regularly revised and adapted to changing national and international expectations of investors and other stakeholders, some important questions have not yet been unanimously answered. Two of these ongoing debates are addressed in this chapter. First, where should the line be drawn between statutory provisions and corporate governance codes as an instrument of self-regulation? Second, what is the rationale behind the idea of independent directors? In particular, how should independence be understood in relation to board members: independent of the incumbent management and company or independent of a controlling shareholder? The chapter discusses both questions using the example of the German Corporate Governance Code.

Non-profit Governance

The non-profit governance literature is emerging, multilevel, and disparate. This chapter provides a critical review of the scholarly literature on non-profit governance, identifies the distinctive and currently most important theoretical frameworks in the field, and outlines the models of good non-profit governance that have emerged, discussing their main traits. The chapter also examines the positions and roles ascribed in the literature to constituents, stakeholders, and other claimant groups involved in non-profit organisations and develops a novel approach to distinguishing between analytically different categories of claimants. The approach is proposed as a tool for future non-profit governance research. After acknowledging the limitations of its scope and identifying upcoming issues in non-profit governance, the chapter concludes with discussion of three lacunae in the current scholarship on non-profit governance that need to be addressed.