Tag Archives | life cycle

Maximizing Shareholder Value: The Workaround from Bartley J. Madden

One of my favorite independent thinkers is Lynn Stout.  Last year I reviewed her excellent book, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public, which makes the point that “U.S. corporate law does not, and never has, required directors of public corporations to maximize shareholder value.” I ended with the following:

I’d like to hear more from Stout on what should be done to incorporate prosocial needs into corporate governance. Don’t tell me self-selecting directors are blessed with a divine right to rule. Continue Reading →

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Corporate Governance and the Business Life Cycle

Corporate Governance and the Business Life Cycle (Corporate Governance in the New Global Economy), Igor Filatotchev (Editor)

Most of the empirical literature on corporate governance is rooted in agency theory. While the principle-agent relationship and monitoring play a central role, governance is also concerned with entrepreneurship and contextual issues. The editor has chosen a good cross section of articles to help develop a framework to understand organizational governance and its life-cycle evolution. Part 1 addresses general interrelationships; part 2 moves us to IPOs; part 3 more mature firms; and part 4 declining firms and buy-outs.

One of the more interesting chapters is by Matthew D. Lynall, Brian R. Golden and Amy J. Hillman, which points to the importance of dominate power at the time of board formation. Path dependence suggests a board composition that meets environmental needs at one Continue Reading →

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