Corporate Governance and U.S. Firms Over the Last Three Decades

Abstract

This paper provides a review, discussion, and analysis of research on the usefulness of corporate governance codes to U.S. firms based on the theories underlying corporate governance, anecdotal evidence, and practices. It reviews the concurrent corporate governance codes and theories in the U.S. business environment, and then classifies the extant literature on corporate governance and U.S. firms over the last three decades. The paper further discusses the association between corporate governance and organizational outcomes such as firm value, operating performance, and financial reporting quality in order to draw reliable conclusions regarding the overall effectiveness of corporate governance codes for U.S. firms and identifies gaps in prior literature. Based on this classification, the paper provides directions for future research regarding challenges and opportunities in order to maximize the benefits of corporate governance to U.S. firms.

Keywords: Corporate Governance, Agency Theory, Sarbanes-Oxley Act 2002

JEL Classification: M14, M40, M48, G30, G34