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The Corporate Governance of Benedictine Abbeys: What can Stock Corporations Learn from Monasteries?

50 Pages Posted: 25 May 2008  

Katja Rost

University of Zurich - Institute for Organization and Administrative Science

Emil Inauen

affiliation not provided to SSRN

Margit Osterloh

University of Basel; Professor (em.) University of Zurich

Bruno S. Frey

CREMA; University of Basel

Abstract

The corporate governance structure of monasteries is analyzed to derive new insights into solving agency problems of modern corporations. In the long history of monasteries, some abbots and monks lined their own pockets and monasteries were undisciplined. Monasteries developed special systems to check these excesses and therefore were able to survive for centuries. These features are studied from an economic perspective. Benedictine monasteries in Baden-Württemberg, Bavaria and German speaking Switzerland have an average lifetime of almost 500 years and only a quarter of them broke up as a result of agency problems. We argue that this is due to an appropriate governance structure, relying strongly on the intrinsic motivation of the members and on internal control mechanisms.

Keywords: Corporate Governance, Principal-Agency-Theory, Psychological Economics, Monasteries, Benedictine Order

JEL Classification: D73, G3, L14, Z12

Suggested Citation

Rost, Katja and Inauen, Emil and Osterloh, Margit and Frey, Bruno S., The Corporate Governance of Benedictine Abbeys: What can Stock Corporations Learn from Monasteries?. Available at SSRN: https://ssrn.com/abstract=1137090 or http://dx.doi.org/10.2139/ssrn.1137090

Katja Rost

University of Zurich - Institute for Organization and Administrative Science ( email )

Plattenstrasse 14
CH-8032 Zurich
Switzerland

Emil Inauen

affiliation not provided to SSRN ( email )

Margit Osterloh (Contact Author)

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland

Professor (em.) University of Zurich ( email )

Südstrasse 11
Zürich, CH-8008
Switzerland

Bruno Frey

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

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