Harmony or Dissonance? The Good Governance Ideas of Academics and Worldly Players

Abstract

This article, originally delivered as a special lecture, asks questions concerning ideas about what constitutes good corporate governance that are espoused by academics, such as financial economists and law professors, and by more worldly players such as legislators, rule makers, governance rating firms, large institutional investors, and law firms that represent corporate clients. Are there discernible trends and patterns in the views espoused by these different categories of actors, despite all the differences among individual actors within each category? I propose that there are such patterns, offer some initial thoughts about the characteristic themes and differences, and hypothesize about the reasons for the differences. At the end I reflect on what a benign policy maker interested in increasing overall social welfare might do with these observations.

Keywords: corporate governance, institutional investors, governance advisory firms, corporate law firms, Delaware courts