ABSTRACT
As this book has a practical and regional focus, arguably we should not dwell too much on the theoretical and global background. But it is important to understand what is meant by ‘corporate governance’, and the nature of the economies and corporate structures from which the concept and implementation arose. The original theoretical key was widely dispersed ownership of the corporation,
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wealth is left a mere symbol of ownership’1 lies with professional managers. Western2 literature on corporate governance often starts from this so-called ‘principal-agent relationship’ and the problems which are alleged to flow from it. This did all stem from Berle and Means who concluded that almost half of large American corporations did not have a single owner who controlled more than 20 per cent of the stock, and argued that the stockholders surrendered ‘disposition of use of the enterprise to those in control’3
by which they meant senior managers and the board. Addressing the future of the US corporation, Berle and Means also said:
This [corporate] system bids fair to be as all-embracing as was the feudal system of its time. [It] demands that we examine both its conditions and its trends, for an understanding of the structure upon which will rest the economic order of the future.4
