Corporate Governance Reform: Improving Competitiveness and Self-Regulation
Presented to Corporate Law Economic Reform Program Conference, Australian National University, November 21, 1997, Canberra
43 Pages Posted: 13 Nov 1997
This paper identifies why US, UK and Australian corporations do not allow directors to avoid conflicts of self-interest, and why corporations lack self-regulation. To avoid conflicts of self-interest, a separation of powers is required to create a compound board. Directors cannot fulfill their duty to monitor and evaluate management with information independent of management unless they obtain advice from advisory councils independently appointed by employees, customers and suppliers. Cybernetic laws show why government regulation cannot be effective, and how compound boards can introduce self-regulation with competitive advantages to simplify the law and reduce the size and costs of government.
JEL Classification: D2, G3, L2
Suggested Citation: Suggested Citation