Working Paper: NBER ID: w9371
Authors: Marco Becht; Patrick Bolton; Alisa Rell
Abstract: Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of interest between various corporate claimholders. In this survey we review the theoretical and empirical research on the main mechanisms of corporate control, discuss the main legal and regulatory institutions in different countries, and examine the comparative corporate governance literature. A fundamental dilemma of corporate governance emerges from this overview: regulation of large shareholder intervention may provide better protection to small shareholders; but such regulations may increase managerial discretion and scope for abuse.
Keywords: No keywords provided
JEL Codes: G32; G34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| partial concentration of ownership (G34) | mitigate collective action problems among investors (G38) |
| hostile takeovers and proxy voting contests (G34) | temporarily concentrate ownership and voting power (G34) |
| delegation of control to boards (G34) | enhance governance (G38) |
| executive compensation contracts (M12) | align managerial interests with those of investors (G34) |
| fiduciary duties and class-action suits (G34) | safeguard shareholder interests (G34) |