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Corporate Governance in Modern Financial Capitalism

Corporate Governance in Modern Financial Capitalism

Old Mutual’s Hostile Takeover of Skandia

Markus Kallifatides, Sophie Nachemson-Ekwall and Sven-Erik Sjöstrand

This insightful book focuses upon corporate governance processes, and explores the conditions required for effective corporate governance and control in 21st century globalized and financialized economies. In presenting a comprehensive study of a cross-border hostile corporate take-over process, describing the actors, institutions and events involved, this book examines and questions the current forms of corporate governance and control – both from a national and a global perspective. Using Old Mutual’s takeover of Skandia as a case study, the authors address corporate governance theory, and highlight its two fundamental dimensions: financial and operational flows.

Chapter 1: A Theoretical Platform

Markus Kallifatides, Sophie Nachemson-Ekwall and Sven-Erik Sjöstrand

Subjects: business and management, corporate governance, strategic management, economics and finance, corporate governance, financial economics and regulation, law - academic, corporate law and governance


THE PURPOSE OF THIS WORK This book has both a theoretical and an empirical purpose. The theoretical purpose is to try to improve socioeconomic theories addressing corporate control and corporate governance, and the empirical ambition is to provide an extensive case study of a hostile cross-border takeover process that helps in understanding corporate control struggle practices in early financial capitalism. Both of these purposes come as responses to the substantial changes in the global economic system that have occurred in recent decades. Taken together, these changes primarily represent a strengthening of predominantly US and UK (Anglo-Saxon) ideals and practices regarding financial markets and corporate governance throughout the rest of the world. Gaining momentum in the 1980s, this diffusion of what we designate as ‘financial capitalism’ has created both uncertainty and controversy in, as well as across, nations and corporations. We focus on the way large listed and globally active corporations in the early twenty-first century are controlled and governed. The marketing of (US) financial capitalism represents both a challenge and a threat to Europe – particularly those countries outside the UK. This is a challenge because it forces (continental) Europeans to weight the pros and cons of their own differing systems, and a threat due to the often-overwhelming power of US economics on the world stage. In this chapter we describe our theoretical platform. The chapter is divided into eight sections, first setting the scene and presenting our chosen empirical case study: Old Mutual’s hostile takeover of Skandia (Section 1.3). Section...

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