Chapter 10: The explosion of interest in corporate governance
The words ‘corporate governance’ are bland, unthreatening and moderately arcane. The issues with which it deals share nothing of those characteristics. Corporate governance deals with possibly the single most important social relationship in modern society, how the historically unprecedented wealth created by 21st-century corporations is controlled and distributed. Despite its importance the debate over corporate governance has been narrow and shockingly impoverished. The issues involved did not begin to attract serious attention until the early 1990s and the whole area was captured by the financial community, which created a dominant discourse focused on the rights of shareholders. In the UK, and to a large extent internationally, corporate governance has become obsessed with the rights of shareholders, expressed in financial terms through the concept of shareholder value. The focus of concern is, quite rightly, senior management and the CEO who, as Berle and Means pointed out 80 years ago, have effectively taken control of the majority of large Anglo-American corporations. Conventional corporate governance therefore seeks to ensure that management will pursue the interests of shareholders.
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