Bob Tricker, editor of Corporate Governance: An International Review since its 1993 debut, has passed the markup pen and role of editor to Christine Mallin. Bob will be sorely missed. Tricker used the words Òcorporate governanceÓ in the title of a seminal book written in 1984; it was a first.
His editorial in the October edition of the Review borrows from the new volume Tricker edited, Corporate Governance: History of Management Thought, tracing the origins of the field with references ranging from Shakespeare's The Merchant of Venice to Adam Smith's often quoted phrase about reduced vigilance of directors watching other people's money, to more recent criticisms of agency theory. The 19th century laid the foundations for the modern corporation, while the 20th century can be viewed as the century of management. According to Tricker, "The new century promises to become the era of corporate governance, as the focus swings to the way power over corporate entities is wielded, made effective and legitimised."
We can only hope he is right. Many other signs point, instead, to an era of growing inequity and selfishness which offers no pause for reflection on concepts such as legitimacy. See for example, Stacked Deck: A Story of Selfishness in America. As Tricker himself indicates, the subject of corporate governance came center stage "less as the result of academic researched-based deliberations, rather more as a result of official inquiries set up in response to the corporate collapses, perceived board level excesses and apparently dominant chief executives of the later part of the 1980s."
Tricker bemoans agency theory as too narrow. "Material self-interest is seldom or even the major motivator of board-level behavior." Stakeholder theories are richer but Tricker sees them having more to do with belief systems than with "sound predictive theory." Tricker has been working toward a metamorphous of corporate governance that has more predictive power than agency theory and is as inclusive as stakeholder theory. "What is needed is a vibrant alternative way to ensure that power is exercised, over every type and form of corporate entity and strategic alliance around the world, in a way that ensures both effective performance and appropriate social accountability and responsibility."
Tricker's dream is only likely to happen when structural changes reconcile the compatibility of wealth creation with social solidarity and mutual responsibility. He offers a hint of the possible driver of future directions. He asks institutional investors whether their exercise of power over companies "represent a re-discovery of nineteenth century capitalism, when ownership was the basis of power, or is this shareholder activism of a different kind, in which case what may be the longer-term implications?"
Tricker's long term view helped forge the Review as a major integrative force in corporate governance with an editorial advisory board that reads like a virtual who's who in the field. Now Professor Mallin steps from her role on that advisory board to editorship, along with her current duties as director of the Centre for Corporate Governance Research at England's University of Birmingham. I look forward to reading where the next eight years will take the Review and its readers.
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