Abstract

http://ssrn.com/abstract=2406565
 


 



Six Components of Corporate Governance That Cannot Be Ignored


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

March 9, 2014

Lex Research Topics in Corporate Law & Economics Working Paper No. 2014-2
European Corporate Governance Institute (ECGI) - Law Working Paper No. 248/2014
Tilburg Law School Research Paper No. 08/2014

Abstract:     
Recent regulatory initiatives that attempt to encourage shareholder engagement, ensure board independence and improve the operation and transparency of corporate groups are of great interest to both academics and practitioners. These initiatives reflect a ‘one-size-fits-all’ approach that may lead to disappointing and counterproductive results and could destabilize and disrupt workable arrangements between management, the board of directors and investors. In this paper, we take a different perspective by showing how there is more to corporate governance than just providing protection to investors and other stakeholders. An important reason for corporate governance is that it also facilitates companies to be innovative, create value and maintain a competitive advantage. To show this, this paper focuses on six components that successful and innovative companies have in common. We support our argument with case studies to show how these companies have found different ways to give substance to the six components.

Number of Pages in PDF File: 44

Keywords: board of directors, CEO, conglomerate, controlling ownership, corporate culture, corporate governance, corporate group, innovation, investor conference, investor relations, one-size-fits-all, shareholder engagement, widely dispersed ownership

JEL Classification: G01, G32, G34, K20, K22, L22, L25, M14, O16

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Date posted: March 10, 2014 ; Last revised: May 26, 2014

Suggested Citation

McCahery, Joseph A. and Vermeulen, Erik P. M., Six Components of Corporate Governance That Cannot Be Ignored (March 9, 2014). Lex Research Topics in Corporate Law & Economics Working Paper No. 2014-2; European Corporate Governance Institute (ECGI) - Law Working Paper No. 248/2014; Tilburg Law School Research Paper No. 08/2014. Available at SSRN: http://ssrn.com/abstract=2406565 or http://dx.doi.org/10.2139/ssrn.2406565

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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