Theories of Corporate Governance
Theories of Corporate Governance
The philosophical foundations of corporate governance
Edited by Thomas Clarke
Contents
Preface Acknowledgements ‘Introduction: Theories of Governance – Reconceptualizing Corporate Governance Theory After the Enron Experience’ Thomas Clarke PART 1 ECONOMIC FOUNDATIONS
ix xi 1
31 34 45
‘The Managerial Revolution in American Business’ Alfred D. Chandler Jr ‘The Impact of the Corporation on Classical Economic Theory’ Adolf A. Berle PART 2 AGENCY THEORY
55 58 64 78
‘Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure’ Michael C. Jensen and William H. Meckling ‘Separation of Ownership and Control’ Eugene F. Fama and Michael C. Jensen ‘Agency Theory: An Assessment and Review’ Kathleen M. Eisenhardt PART 3 MANAGERIAL HEGEMONY
93 96 108
‘Directors: Myth and Reality’ Myles L. Mace ‘Pawns or Potentates: The Reality of America’s Corporate Boards’ Jay W. Lorsch and Elizabeth MacIver PART 4 STEWARDSHIP THEORY
115 118
‘Toward a Stewardship Theory of Management’ James H. Davis, F. David Schoorman and Lex Donaldson
vi
C O NTE NTS
PART 5
EXTERNAL PRESSURES
135 138
‘The Resource Dependence Role of Corporate Directors: Strategic Adaptation of Board Composition in Response to Environmental Change’ Amy J. Hillman, Albert A. Cannella Jr and Ramona L. Paetzold ‘Institutional and Strategic Choice Perspectives on Board Involvement in the Strategic Decision Process’ William Q. Judge Jr and Carl P. Zeithaml ‘A General Theory of Network Governance: Exchange Conditions and Social Mechanisms’ Candace Jones, William S. Hesterly and Stephen P. Borgatti
149
159
PART 6
STAKEHOLDER THEORY
171
‘Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century’ Margaret M. Blair ‘The Stakeholder Corporation: A Business Philosophy for the Information Age’ Thomas Clarke
174 189
PART 7
THEORIES OF CONVERGENCE
203 206
‘Corporate Leadership
The philosophical foundations of corporate governance
Edited by Thomas Clarke
Contents
Preface Acknowledgements ‘Introduction: Theories of Governance – Reconceptualizing Corporate Governance Theory After the Enron Experience’ Thomas Clarke PART 1 ECONOMIC FOUNDATIONS
ix xi 1
31 34 45
‘The Managerial Revolution in American Business’ Alfred D. Chandler Jr ‘The Impact of the Corporation on Classical Economic Theory’ Adolf A. Berle PART 2 AGENCY THEORY
55 58 64 78
‘Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure’ Michael C. Jensen and William H. Meckling ‘Separation of Ownership and Control’ Eugene F. Fama and Michael C. Jensen ‘Agency Theory: An Assessment and Review’ Kathleen M. Eisenhardt PART 3 MANAGERIAL HEGEMONY
93 96 108
‘Directors: Myth and Reality’ Myles L. Mace ‘Pawns or Potentates: The Reality of America’s Corporate Boards’ Jay W. Lorsch and Elizabeth MacIver PART 4 STEWARDSHIP THEORY
115 118
‘Toward a Stewardship Theory of Management’ James H. Davis, F. David Schoorman and Lex Donaldson
vi
C O NTE NTS
PART 5
EXTERNAL PRESSURES
135 138
‘The Resource Dependence Role of Corporate Directors: Strategic Adaptation of Board Composition in Response to Environmental Change’ Amy J. Hillman, Albert A. Cannella Jr and Ramona L. Paetzold ‘Institutional and Strategic Choice Perspectives on Board Involvement in the Strategic Decision Process’ William Q. Judge Jr and Carl P. Zeithaml ‘A General Theory of Network Governance: Exchange Conditions and Social Mechanisms’ Candace Jones, William S. Hesterly and Stephen P. Borgatti
149
159
PART 6
STAKEHOLDER THEORY
171
‘Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century’ Margaret M. Blair ‘The Stakeholder Corporation: A Business Philosophy for the Information Age’ Thomas Clarke
174 189
PART 7
THEORIES OF CONVERGENCE
203 206
‘Corporate Leadership