Corporate Governance and Its Political Economy

Oxford Handbook of Corporate Governance, Forthcoming

34 Pages Posted: 4 Apr 2015 Last revised: 17 Nov 2016

See all articles by Mark J. Roe

Mark J. Roe

Harvard Law School

Massimiliano Vatiero

University of Trento - Department of Economics and Management; Università della Svizzera italiana

Date Written: April 2, 2015


To fully understand governance and authority in the large corporation, one must attend to politics. Because basic dimensions of corporate organization can affect the interests of voters, because powerful concentrated interest groups seek particular outcomes that deeply affect large corporations, because those deploying corporate and financial resources from within the corporation to buttress their own interests can affect policy outcomes, and because the structure of some democratic governments fits better with some corporate ownership structures than with others, politics can and does determine core structures of the large corporation. In this review piece for the Oxford Handbook on Corporate Governance, we analyze the generalities and then look at core aspects of corporate governance that have been, and continue to be, politically influenced and sometimes politically driven: first, the historically fragmented ownership of capital in the United States; second, the postwar power of labor in Europe and its corporate impact; and, third, the ongoing power of the American executive and the American board as due in part to their influence on political and legal outcomes.

Keywords: corporate governance, ownership separation, politics and public choice, securities markets, social democracy

JEL Classification: G30, J50, K22, 016, P16

Suggested Citation

Roe, Mark J. and Vatiero, Massimiliano, Corporate Governance and Its Political Economy (April 2, 2015). Oxford Handbook of Corporate Governance, Forthcoming. Available at SSRN: or

Mark J. Roe (Contact Author)

Harvard Law School ( email )

Griswold 502
Cambridge, MA 02138
United States
617-495-8099 (Phone)
617-495-4299 (Fax)

Massimiliano Vatiero

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100

Università della Svizzera italiana ( email )

Via Giuseppe Buffi 13
Lugano, Ticino 6900

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