A Framework for Assessing Corporate Governance Reform∗
نویسندگان
چکیده
In light of recent corporate scandals, numerous proposals have been introduced for reforming corporate governance. This paper provides a theoretical framework through which to evaluate these reforms. Unlike various ad hoc arguments that have been made, this framework recognizes that governance structures arise endogenously in response to the constrained optimization problems faced by the relevant parties. Contract theory provides a set of necessary conditions under which governance reform can be welfare-improving: 1) There is asymmetric information at the time of contracting; or 2) Governance failures impose externalities on third parties; or 3) The state has access to remedies or punishments that are not available to private parties. We provide a series of models that illustrate the importance of these conditions and what can go wrong if they’re not met. ∗The authors thank seminar and conference participants at the London Business School, the University of California, the University of Illinois, the Swedish Institute for Financial Research Conference, Stockholm, the Olin Business School’s Second Annual Conference on Corporate Governance. The authors are grateful to Philip Bond and, especially, Denis Gromb for their comments and suggestions. †Willis H. Booth Professor of Banking and Finance. Contact information — Phone: (510) 642-7575. E-mail: [email protected]. Full address: University of California • Walter A. Haas School of Business • 545 Student Services Bldg. #1900 • Berkeley, CA 947201900. ‡Stanley C. and Joan J. Golder Distinguished Chair in Finance. Contact information — Phone: (217) 265-0258. E-mail: [email protected]. Full address: University Of Illinois • 340 Wohlers Hall • 1206 S. Sixth Street Champaign, IL 61820. Copyright c © 2006 by Benjamin E. Hermalin & Michael S. Weisbach. All rights reserved. Hermalin and Weisbach Introduction 1
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تاریخ انتشار 2006