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The Unfinished Business of Governance

Monitoring and Regulating Industries and Organizations

Alexander Styhre

The Unfinished Business of Governance provides an overview of the changing landscape of governance and focuses on the three specific domains of corporate governance, university governance, and market governance. The book examines how changes in competitive capitalism and the wider social organization of society is recursively both determined by, and actively shaping underlying governance ideals and their practices. The shared theme in the various changes of the governance system is that free market theory and ideologies have gradually penetrated governance practices.
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Index

Alexander Styhre

absentee ownership 41

Academic Ranking of World Universities (ARWU) 130–31, 133

activist shareholders 58

agency capitalism 57, 60

agency capture 192–3

akrasia 6, 78, 104

algorithm governance 115, 120, 122, 125–7, 140, 150

American International Group (AIG) 216, 235–6

Anholt City Ranking 128

anomalies 81

asset-backed securities (ABS) 172

Bagehot, W. 236

Bagehot rule 220–21, 226

bank bailout 219–20

Bank Holding Companies (BHC) 174, 181–2

Bank of America 174, 186, 209

Bear Stearns 186

behavioural economics 26, 77–8, 80, 85–7, 113, 116, 127

Berle–Means firm 33, 40, 42, 48, 53, 57–8, 60

Berlin, I. 36, 114

Bernanke, B.S. 165, 169–71, 187, 193, 217

bias 78–80, 82–3, 85, 89, 111–12, 120–21, 123, 152, 171, 176

bounded rationality 6, 97

Box, G.E.P. 150

Brandeis, L.D. 33, 41–2, 45, 52

Buffet, W.E. 174

Bush, G.W. 212, 214, 233, 235

business judgment rule 61, 69, 95

Carter, J.E. Jr. 187

Cassano, J. 235

central bank independence 13–14

Chief Risk Officers (CROs) 198

cognitive biases 26, 78, 82–3

cognitive capture 193

cold war rationality 72, 74, 77, 89

Collateralized Debt Obligations (CDOs) 166–7, 172–3, 199–200, 235

Commodity Exchange Act 200

commodity futures 59–60, 179–80

Commodity Futures Trading Commission (CFTC) 200, 237

Commodity-Linked Notes (CLNs) 179

community of fate mentality 229–30

concession view of corporate law 49–50

corporate elites 53, 56–7, 62

Corporate Social Responsibilities (CSR) 133

corporatism 48, 50

Countrywide 186

Credit Default Swaps (CDS) 171, 205

crony capitalism 212, 229

data analytics 121

debiasing efforts 79–80

Delaware Chancery Court 64

Delaware law 109

Delaware Supreme Court 109

delegatory relationship 51

democratic deficit 24, 126, 195

democratization of credit 157–8, 169

Director, A. 46

Dodd–Frank Act 150, 183, 198, 200, 211

Drexel Burnham Lambert 235

economic inequality 3–12, 28–31

efficiency criterion 96–8, 100–103, 105, 207–8

egalitarianism 29–30

elasticity of law 224

Enron 155, 181, 212, 235

entrepreneurial activists 67

epistemic accident 87

epistemic scaffold 86–7

epistemic self-interest 105–7

Equifax 151

equilibrium theory 95

European Economic Association (EEA) 137

Experian 151

external validity 80, 84, 86

ExxonMobil 176

Fair Value Accounting (FVA) 110–11

Fair Value Measurement (FVM) 111

fallacy of misplaced concreteness, the 95, 105, 147–8

Federal Deposit Insurance Corporation 167

Federal Reserve 165, 187, 193, 196, 291, 217, 222–3, 226, 235, 237

Federal Securities and Exchange Commission (FSEC) 173

FICO scores 122–4, 151, 165–6

Financial Times 135

financialization 8, 123, 177

Fitch 154

Forbes 132

Fortune 1000 companies 32, 57

Fowler, H.H. 214

free-rider problem 58, 65, 112

Gaussian Copula 172–3

Geithner, T.F. 191

General Motors 55, 64

Ghostwriting 138–40

Gini Index 9, 31

Glass–Steagall Act 155, 175, 205

Goldman Sachs 174, 181, 213–14

governance assemblages 24

governance devices 24, 27, 31, 152, 189

governance entrepreneurs 58

governance regimes 3–6, 61, 98, 115–16, 126, 140, 148–51

Gramm–Leach–Bliley Act 155, 237

Great Depression 7, 53, 183

Great Recession 9, 16, 32, 108, 156, 160, 163, 176, 227

Greenberg, M.R. 236

Greenspan, A. 175, 185

hedge fund 2–3, 57–60, 67, 70, 178, 199, 237

hedge fund activism 2, 67, 199

hostile takeover 101–3

ideological capture 193

idiosyncratic risk 93–4, 214

incomplete contracts 64, 100

indicator culture 116–17, 140, 150

individualism 51–2

industry-sponsored research 139

Initial Public Offerings (IPOs) 11, 109, 199, 232

interlocked directors 56

International Accounting Standards Board (IASB) 56

issuer pay principle 219

JPMorgan Chase (JPMC) 181, 183

Kierkegaard, S.A. 134

Krugman, P. 191

la longue durée 33

learned ignorance 233

legal theory of finance 216. 222–4

legislative capture 193, 195

Lehman Brothers 174

Li, D.X. 172

Lippmann, W. 208

lobbying 12, 55, 193–4, 204, 207, 210–11, 228

management by objectives 116

managerialism 40, 61

market logic 110, 115, 147, 149

Matthew effect 217–18

Milken, M. 102, 235

Moody’s 154, 236

moral hazard 70, 89, 151, 166, 187, 207, 212, 215–17, 221, 227, 236–7

Morgan Stanley 174, 181–4, 186

mortgage-backed securities (MBS) 169, 199–200, 235

multiple interlock ties 56

negative freedom 36, 39, 63

neo-paternalism 77–8

new behaviourism 126

New Deal, the 15, 22, 33, 46, 53, 153, 205, 211, 233

new paternalism 26, 77

New Public Management 116, 140

Nirvana fallacy, the 104–6

noise traders 176–7

nondepository financial intermediaries 235

nonlegally enforceable governance mechanisms 100

Obama, B.H., II 191, 194, 212

oil price 175–6, 178

ownership society 233

paternalism 25–6, 76–8, 148

Paulson, H.M. Jr. 188, 214

political accountability 4–5, 13, 15–16, 117, 204, 208, 214, 218–19, 221–2, 225, 227, 230–31

politics of measuring, the 116–17, 120, 148

positive freedom 39, 63

post-Berle–Means firm 52

precommitment devices 207

predatory lending 164, 167–9, 197

prisoners’ dilemma 75

radical uncertainty 87

RAND Corporation 73, 76

rational apathy 65, 199

Rational Choice Theory (RCT) 46, 72–6, 88, 236

Reagan, R.W. 16, 54, 175

regulatory capture 157, 173, 190–91, 194, 196, 228

robot trading 66

Roosevelt, F.D. 22, 33, 42

Rubin, R.E. 214, 217

rule of thumb 97

Sarbanes–Oxley Act (SOX) 155, 198–9, 212

scientific fraud 137

scoring society 120

second floor securities 172

Securities and Exchange Commission (SEC) 45, 154, 173, 213, 230

shadow banking 160–64, 235

Sherman Act 67

Silicon Valley Model of Entrepreneurship 142, 145–6

Sloan, A.P., Jr 55

Smith, A. 34–5, 38–9, 121

Soviet 73–4, 104

staggered boards 91–2

Standard & Poor’s 189–90

statism 33, 37, 66

sub-prime mortgage market 165, 175

superconnectors 56–7

Super-Senior CDOs 173

systemic risk 9, 28–9, 159, 166, 168, 173, 186, 194, 197, 214, 216–17, 225–7, 229, 235, 238

takeover bid 102–3

thin descriptions 115

think tanks 106, 206

Thompson, G.K. 170

Times Higher Education Supplement (THES) 130

transnational governance 4, 24–5, 116, 120, 125, 194, 207, 234

TransUnion 151

trustees 43, 64, 100

Troubled Assets Relief Program (TARP) 188, 235

uninformed traders 176–7

unitary boards 91

United States Senate Finance Committee 176

U.S. Bureau of Labor Statistics 10

U.S. Department of Justice (DOJ) 212–13

U.S. News & World Report 130

utilitarian epistemic cultures 112, 205

Value-at-Risk (VaR) 170

Veblen, T.B. 33, 41–3, 52, 66

Vietnam War 18, 54

Volcker, P.A. 187–8

Wachovia 170, 186

Wall Street Crash 33, 40, 42, 44

war on inflation 14

Washington Consensus 66, 226

Washington Mutual 186

Watergate scandal, the 18, 54

Wells Fargo 186, 209

winner-take-all politics 7

WorldCom 19