New Directions in Corporate Governance

Annual Review of Sociology, Vol. 31, pp. 143-162, August 2005

Posted: 21 Oct 2005

See all articles by Gerald F. Davis

Gerald F. Davis

University of Michigan, Stephen M. Ross School of Business

Abstract

Corporate governance describes the structures, processes, and institutions within and around organizations that allocate power and resource control among participants. Law and economics scholars have developed a view of the public corporation as a nexus-of-contracts whose structure is driven by the requirements of financial markets, and thus features of the corporation and its surrounding institutions are theorized in terms of their function in directing corporations toward share price as a criterion of value. Working from this base, more recent research has studied historical and cross-national variation in governance institutions, producing highly varied interpretations of their sources and function. Sociological work, particularly within organization theory, has critiqued this functionalist view and provided alternative interpretations based on networks, power, and culture. The most promising contemporary work seeks to analyze governance in terms of the dynamics of institutions - where they originate, how they operate, how they change, and how they spread beyond their original purposes.

Keywords: corporate governance, social networks, organization theory

JEL Classification: G34, G32, D23

Suggested Citation

Davis, Gerald F., New Directions in Corporate Governance. Annual Review of Sociology, Vol. 31, pp. 143-162, August 2005. Available at SSRN: https://ssrn.com/abstract=822881

Gerald F. Davis (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI 48109-1234
United States
734-647-4737 (Phone)
734-936-0282 (Fax)

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