Abstract

http://ssrn.com/abstract=2374810
 


 



The 'Ignored' Third Dimension of Corporate Governance


Joseph A. McCahery


Tilburg University - School of Law; European Banking Center (EBC); European Corporate Governance Institute (ECGI); Duisenberg School of Finance; Tilburg Law and Economics Center (TILEC)

Erik P. M. Vermeulen


Tilburg University - Department of Business Law; Philips International BV; Tilburg Law and Economics Center (TILEC); Kyushu University - Faculty of Law

January 5, 2014

European Corporate Governance Institute (ECGI) - Law Working Paper No. 235/2014
Lex Research Topics in Corporate Law & Economics Working Paper No. 2014-1

Abstract:     
The separation of ownership and control has always been central in corporate governance debates. A large body of literature has sought to show that control-enhancing arrangements can deter investors. However, the experience of the last few years has suggested that companies with widely dispersed ownership can suffer from their own issues – not least short-termism. So, is ownership structure really the dividing line between ‘good’ and ‘bad’ governance that many commentators suggest? This short essay suggests that policymakers, academics and practitioners should be careful in deriving conclusions about the most effective ownership and control structures. Ownership is firm-specific and varies across life cycle stages, sectors, regions, countries and cultures. Ownership structures are also dynamic in that they (should) change over time according to evolving markets and shifting business strategies and practices.

Number of Pages in PDF File: 16

Keywords: controlling ownership, corporate governance, innovation, investor relations, shareholder value, widely dispersed ownership

JEL Classification: G01, G34, K20, K22, L22, L25, O16

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Date posted: January 6, 2014 ; Last revised: January 24, 2014

Suggested Citation

McCahery, Joseph A. and Vermeulen, Erik P. M., The 'Ignored' Third Dimension of Corporate Governance (January 5, 2014). European Corporate Governance Institute (ECGI) - Law Working Paper No. 235/2014; Lex Research Topics in Corporate Law & Economics Working Paper No. 2014-1. Available at SSRN: http://ssrn.com/abstract=2374810 or http://dx.doi.org/10.2139/ssrn.2374810

Contact Information

Joseph A. McCahery
Tilburg University - School of Law; European Banking Center (EBC) ( email )
Warandelaan 2
Tilburg, 5000 LE
Netherlands
+31-(0)13-466-2306 (Phone)
+31-(0)13-466-2323 (Fax)
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Duisenberg School of Finance ( email )
Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands
Tilburg Law and Economics Center (TILEC)
Warandelaan 2
Tilburg, 5000 LE
Netherlands
Erik P.M. Vermeulen (Contact Author)
Tilburg University - Department of Business Law ( email )
Philips International BV ( email )
Amstelplein 2
Amsterdam, Noord-Holland 1070 MX
Netherlands
Tilburg Law and Economics Center (TILEC)
Warandelaan 2
Tilburg, 5000 LE
Netherlands
Kyushu University - Faculty of Law ( email )
6-19-1, Hakozaki, Higashiku
Fukuoka, 812-8581
Japan
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