The Corporate Governance Role of the Media
I. J. Alexander Dyck
University of Toronto - Rotman School of Management
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); University of Chicago - Polsky Center for Entrepreneurship; European Corporate Governance Institute (ECGI)
CRSP Working Paper No. 543
In this paper we discuss the role of the media in pressuring corporate managers and directors to behave in ways that are "socially acceptable". Sometimes this coincides with shareholders' value maximization, others not. We provide both anecdotal and systematic evidence that media affect companies' policy toward the environment and the amount of corporate resources that are diverted to the sole advantage of controlling shareholders. Our results have important consequences for the focus of the corporate governance debate and for the feasibility of reforms aimed at improving corporate governance around the world.
Number of Pages in PDF File: 38
JEL Classification: G30
Date posted: November 1, 2002
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