ABSTRACT
This book provides alternative explanations of corporate governance, deriving its theoretical orientation from new institutional economics (NEI), strategic country studies, coverage of key corporate governance issues and linking of corporate governance to public governance. The popularity of corporate governance as a field of study can be traced to Berle and Means’ (1932, 1968) work on the separation of ‘ownership’ and management in firms and the potential conflict of interests between ‘owners’ and managers. At the same time, effective management of firms has also been linked to national economic growth. This is possibly as a result of the realisation, as James D. Wolfensohn, a former World Bank president, noted that ‘the proper governance of companies will become crucial in the world economies as the proper governance of countries’ (Monks and Minow, 2008, p.352). These twin developments have led to the creation and adoption of different corporate governance models by firms and economies. The orthodoxy in scholarship is arguably the recognition of three main models of corporate governance: the entrepreneurship and private property-based Anglo-American model; Continental European model of dominant shareholders’ interest; and the Japanese model of an oriented governance system. These corporate governance models are different in several ways and may have been fit for purpose in the developed economies where they originated from, including the facilitation of national economic development. On the one hand, the success of the corporate governance models in developed economies helps to establish a link between proper corporate governance and overall public governance. On the other hand, the success of the corporate governance models can also be attributable to their suitability for the particular circumstances of the developed economies. For example, the Japanese model may not work for the United Kingdom and the United States where the Anglo-American model is practised, suggesting that the effectiveness of corporate governance models is context-dependent.
