On-Going Board Reforms: One-Size-Fits-All and Regulatory Capture

Abstract

Proponents of board reforms assume that corporate structures and director-specific provisions matter. This paper argues that reformers have set minimum standards, but failed to take into accounts various trade-offs and regulatory capture effects. It is thus suggested to increase the flexibility of existing provisions and use this new approach to improve shareholder protection against board failures in general and failures of institutional investor boards in particular.

Keywords: Auditor, best practices, board, board discretion, board function, board reform, codes, compensation, corporate governance, director liability, independent director, institutional investor, regulation, regulatory capture, self regulation

JEL Classification: D23, G32, G34, G38, K22, M14