The Institutions of Corporate Governance

DSpace/Manakin Repository

The Institutions of Corporate Governance

Citable link to this page

 

 
Title: The Institutions of Corporate Governance
Author: Roe, Mark J.
Citation: Mark J. Roe, The Institutions of Corporate Governance (John M. Olin Center for Law, Economics and Business, Harvard Law School, Discussion Paper Series No. 488, 2004).
Full Text & Related Files:
Abstract: In this review piece, I outline the institutions of corporate governance decision-making in the large public firm in the wealthy West. By corporate governance, I mean the relationships at the top of the firm - the board of directors, the senior managers, and the stockholders. By institutions I mean those repeated mechanisms that allocate authority among the three and that affect, modulate, and control the decisions made at the top of the firm.

Core corporate governance institutions respond to two distinct problems, one of vertical governance (between distant shareholders and managers) and another of horizontal governance (between a close, controlling shareholder and distant shareholders). Some institutions deal well with vertical corporate governance but do less well with horizontal governance. The institutions interact as complements and substitutes, and many can be seen as developing out of a primitive of contract law.

In Part I, I sort out the central problems of corporate governance. In Part II, I catalog the basic institutions of corporate governance, from markets to organization to contract. In part III, I consider contract law as corporate law's primitive building-block. In Part IV, I briefly examine issues of corporate legitimacy that affect corporate governance by widening or narrowing the tools available. The interaction between political institutions and corporate governance institutions is an inquiry still in its infancy but promises large returns. In Part V, I re-examine corporate governance in terms of economies of scale, contract, markets, and property rights. Then I summarize and conclude.
Published Version: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=612362
Other Sources: http://www.law.harvard.edu/programs/olin_center/papers/pdf/Roe_488.pdf
http://lsr.nellco.org/harvard_olin/488/
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:12207443
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)

 
 

Search DASH


Advanced Search
 
 

Submitters