The Making of the Shareholder Primacy Governance Model: Price Theory, the Law and Economics School, and Corporate Law Retrenchment Advocacy

Styhre, Alexander

doi:10.1515/ael-2016-0021

Cited by 7 publications

(6 citation statements)

References 97 publications

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“…The fundamental premise of shareholder primacy is that organizations exist to maximize shareholder value (Mudawi & Timan, 2018;Styhre, 2018). Agency theory, in turn, refers to the separation of ownership and control between owners as principals and managers as agents (Jensen & Meckling, 1976).…”

Section: Theoretical Underpinningmentioning

confidence: 99%

Corporate Governance by South African State-Owned Entities (SOEs) – Contributing to Achieving Agenda 2063

Ackers

2022

PJGD

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Following centuries of institutional colonization, Africa remains in dire need of development and has failed to realize its potential to drive sustainable economic growth and prosperity. Despite the residual contribution of Africa’s colonial legacy to this malaise, it is suggested that African states should stop blaming coloniality for their failure to develop and accept responsibility for their own socioeconomic development. To arrest the downward spiral and provide the platform necessary to drive sustainable development across the African continent, the African Union launched Agenda 2063. To claim its rightful place in the global economy with a renewed focus on accountability, African states must change their development trajectory and address the economic, environmental, social, and governance interests of their legitimate stakeholders as they strive for sustainable development and their beneficiaries with added value. African states can no longer afford to remain passive participants in the process, providing raw materials for beneficiation by the Global North. The findings of this paper are based on the assertion that effectively governed state-owned entities (SOEs) represent vehicles available to states to leverage their drive for socioeconomic development in their respective countries, thereby contributing to achieving the Agenda 2063 goals. Despite relying on quantitative data to inform a corporate governance conformance matrix, purposively developed from the OECD Guidelines, World Bank Toolkit, and Agenda 2063, the study adopts an interpretative approach to thematically analyze the content of the published annual reports of South African SOEs. While the relatively high conformance scores achieved by the South African SOEs appear to suggest conformance with strong corporate governance practices. It belies the fact that several of these highly compliant SOEs are currently under investigation in relation to numerous instances of serious fraud and corruption. The incongruence of these public disclosures with the de facto situation implies that they do not represent a meaningful attempt by SOEs to discharge their governance obligations effectively. Instead, they may simply be an attempt to placate stakeholders that these SOEs were being effectively governed rather than to account to stakeholders meaningfully. The study concludes that merely imposing a regulatory, corporate governance framework will not be sufficient to ensure the effectiveness of governance in SOEs, but rather that effective processes must be established to monitor and enforce compliance with these frameworks, together with effective consequence management for non-compliance.

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Section: Theoretical Underpinningmentioning

confidence: 99%

Corporate Governance by South African State-Owned Entities (SOEs) – Contributing to Achieving Agenda 2063

Ackers

2022

PJGD

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“…In terms of shareholder primacy, organisations exist to maximise shareholder value (Mudawi and Timan, 2018; Styhre, 2018). Agency theory, in turn, refers to the separation of ownership and control between organisational principals (owners) and agents (managers) (Jensen and Meckling, 1976), causing information asymmetry, where agents know more about organisations than owners (Kiliç and Kuzey, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

The adoption of integrated reporting by state-owned enterprises (SOEs) – an international comparison

Ackers

Adebayo

2021

SRJ

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Purpose This paper aims to establish the extent to which South African state-owned entities (SOEs), where integrated reporting is a quasi-mandatory reporting requirement, have incorporated the principles of the international integrated reporting framework. These identified South African SOE reporting practices are compared with the ‘integrated reporting’ related disclosures of SOEs in selected countries, where integrated reporting remains voluntary. Design/methodology/approach This paper deploys a qualitative research approach, to thematically analyse the content of publicly available annual or integrated reports of South Africa SOEs, as the primary country of analysis, with those of their counterparts in five purposively selected countries. The relative scores for the SOEs of each country is calculated using a disclosure index derived from the international integrated reporting framework principles. Findings The paper found that despite being a quasi-mandatory reporting requirement, not all South African SOEs complied with all the international integrated reporting framework principles. Accepting the assertion that integrated reporting enhances organisational transparency and accountability, the accountability disclosure practices of South African SOEs appear more comprehensive than their counterparts in other countries. Originality/value Extant research into integrated reporting has primarily focussed on the profit-seeking private sector, with limited research into its applicability in the public sector. This paper attempts to address this paucity by examining aspects of integrated reporting by South African SOEs, which are then compared to accountability reporting practices in other countries.

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“…It is important not to forget that these arguments suppose that we have a proper understanding about how market prices are formed, which is another allegation which is far from being demonstrated (Shiller, 1981, 1984, 2005; Bougen and Young, 2012; Biondi, 2015, 2018; Cardao-Pito and Ferreira, 2018a, 2018b; Cardao-Pito, 2017; 2020, 2021a; Georgiou, 2018; Keynes, 1936; Shubik, 2007, 2011; Styhre, 2017). Furthermore, the problem of embezzlement is rarely, if ever, addressed.…”

Section: Production Of Accounting and Auditing Norms And The Problem ...mentioning

confidence: 99%

An embezzler test for norms, standards and regulations

Cardao-Pito

2021

JFC

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Purpose The purpose of this study is to address the question that economic standards, norms and regulations can possess weak spots that might be exploitable for the embezzlement of an organization’s assets with resultant material consequences in money laundering,tax evasion, fraud, corruption and other potential financial crimes. Design/methodology/approach The author’s methodological approach is to introduce and discuss a new logical-deductive test that the author names “embezzler test”. The author’s test investigates regulatory architectures from the perspective of someone attempting to divert assets from or to an organization. It appraises whether a potential embezzler could divert resources without being detected and sanctioned. Findings The embezzler test can be applied to a broad range of standards, norms and regulations. Research limitations/implications This new test can be improved and further calibrated in future research. Practical implications Researchers, regulators and law makers can use the new test to identify and eventually fix weak spots for embezzlement in norms, standards and regulations. Originality/value To the best of the author’s knowledge, such a test has never been formulated or applied before to identify weak spots for potential embezzlement in regulatory architectures.

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The Making of the Shareholder Primacy Governance Model: Price Theory, the Law and Economics School, and Corporate Law Retrenchment Advocacy

Cited by 7 publications

References 97 publications

Corporate Governance by South African State-Owned Entities (SOEs) – Contributing to Achieving Agenda 2063

Corporate Governance by South African State-Owned Entities (SOEs) – Contributing to Achieving Agenda 2063

The adoption of integrated reporting by state-owned enterprises (SOEs) – an international comparison

An embezzler test for norms, standards and regulations

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