Edited by Jonathan P. Doh and Stephen A. Stumpf
Chapter 14: Corporate Governance Reform: Global, North American and European Trends
Christine Mallin Introduction Corporate governance is increasingly high on the agenda for directors, investors and governments alike in the wake of ﬁnancial collapses and corporate scandals in recent years. These collapses and scandals have not been limited to a single country, or even a single continent, but have been a global phenomenon. They have not been conﬁned to a particular industry, nor to a particular business form, and, whilst it has been the large ﬁrms that have hit the headlines, there have doubtless been similar events in smaller ﬁrms which have not been caught in the glare of media headlines but which nonetheless will have had a signiﬁcant impact on the lives of those affected, whether they be employees who have lost their jobs, or providers of equity or debt ﬁnance. Many ﬁnancial scandals stem from problems rooted in the separation of ownership and control. As long ago as 1838, Adam Smith identiﬁed this problem: ‘the directors of such companies however being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance’ (Smith, 1838, p. 586). In this chapter the concept of corporate governance and its growth as a global phenomenon are examined. The impact of differing legal systems and ownership structures and how these may affect corporate governance developments are discussed. The inﬂuence of institutional investors is examined and it is shown how, with the internationalization of cross-border...
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