The Purposes and Accountability of the Corporation in Contemporary Society: Corporate Governance at a Crossroads

Bradley, Michael; Schipani, Cindy A.; Sundaram, Anant K.; Walsh, James P.

doi:10.2307/1192226

Cited by 150 publications

(87 citation statements)

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“…2 We will not attempt to provide a detailed list of references for these two opposing conceptions of the corporate form of organization, because they have been dealt with in a substantial amount of legal scholarship (see, e.g., Ruder 1965;Eisenberg 1983;Bratton 1989a, b;McDaniel 1991;Minow 1991;Millon 1990Millon , 1991Millon , 1995Hazen 1991;Allen 1992;Blair and Stout 1999). For a comprehensive set of references and citations, see Bradley et al (1999). The communitarian conception of the corporation is closely identified with the stakeholder and corporate social responsibility viewpoints and has its origins in the pioneering work of Etzioni (1988Etzioni ( , 1993 Drucker (1958) emphasizes organizational survival rather than rational profit maximization as the central goal the managers must pursue.…”

Section: Resultsmentioning

confidence: 99%

“…These legal and intellectual developments paralleled important regulatory developments. As Bradley et al (1999) point out, " the primary focus of this regulatory activity was on capital providers to the firm" (1999, p. 24). This era witnessed the Securities and Exchange Act of 1934, the Glass-Steagall Act of 1932, and the Investment Company Act of 1940.…”

Section: Evolution Of Corporate Goals (And Arguments Thereof) In the mentioning

confidence: 99%

“…Beginning with the work of Milton Friedman, and his view that the sole social responsibility of business is to increase profits (Friedman 1970 (Alchian and Demsetz 1972, Jensen and Meckling 1976, Fama and Jensen 1983, as well as the notion of the corporation as a nexus of contracts, as put forth by the law and economics scholars (e.g., Easterbrook and Fischel 1991), bolstered this attack. The upswing in the market for corporate control and hostile takeovers starting with the 1980s and lasting nearly two decades (Holmstrom and Kaplan 2001), the unstoppable globalization in product and capital markets (Bradley et al 1999), the return to focus and deconglomeration that reversed the corporate practices of the 1950s and 1960s (Davis et al 1994), the ascendance of Reagan-Thatcher capitalism (and the fall of communism) in the political realm, the Internet-communications-biotechnology revolution in the technological realm (both sustaining and sustained by the bull market of the 1990s in the capital markets realm), and the apparently inexorable trend that the world was beating a path to the Anglo-American model in the governance realm, all converged to solidify the ascendance of the shareholder view of the firm. This view-the corporation as a shareholder value maximizing economic entity; emphasizing contractual exchanges, with the role of law to promote contractual freedom; with discipline forced by the invisible hand, the market for corporate control; and competition in product, labor, and capital markets-seemed to have all but trumped the alternative (Bradley et al 1999).…”

Section: Evolution Of Corporate Goals (And Arguments Thereof) In the mentioning

confidence: 99%

See 2 more Smart Citations

The Corporate Objective Revisited

Sundaram

Inkpen

2004

Organization Science

Self Cite

563

237

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T he stock market convulsions and corporate scandals of 2001 and 2002 have reignited debate on the purposes of the corporation and, in particular, the goal of shareholder value maximization. We revisit the debate, re-examine the traditional rationales, and develop a set of new arguments for why the preferred objective function for the corporation must unambiguously continue to be the one that says "maximize shareholder value." We trace the origins of the debates from the late nineteenth century, their implications for accepted law and practice of corporate governance in the United States, and their reflection in shareholder versus stakeholder views in the organization studies literature and contractarian versus communitarian views in the legal literature. We address in detail possible critiques of the shareholder value maximization view. Although we recognize certain boundary constraints to our arguments, we conclude that the issues raised by such critiques and constraints are not unique to the shareholder value maximization view, but will exist even if the firm is managed on behalf of nonshareowning stakeholders.

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Section: Resultsmentioning

confidence: 99%

Section: Evolution Of Corporate Goals (And Arguments Thereof) In the mentioning

confidence: 99%

Section: Evolution Of Corporate Goals (And Arguments Thereof) In the mentioning

confidence: 99%

See 1 more Smart Citation

The Corporate Objective Revisited

Sundaram

Inkpen

2004

Organization Science

Self Cite

563

237

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“…Van der Laan Smith et al (2005) find that the level of CSD is related to the country of origin of the corporation and specifically to the orientation of the country. A stakeholder orientation, is called communitarianism, by Bradley et al (1999). This term relates to corporate worldview of communitarianism, which contrasts with contractarianism.…”

Section: Stakeholder Theorymentioning

confidence: 99%

“…Van der Laan Smith et al (2005) construct a prediction model for country of origin, with CSD as predictor, in a comparison between the US and Scandinavian companies. They add the institutional factors of corporate governance and ownership structure to their theoretical framework to explain the country-specific shareholder and stakeholder orientation, based on Bradley et al (1999). They state that ownership and corporate governance structures in Scandinavia contribute to a stronger stakeholder orientation, compared with the USA.…”

Section: Introductionmentioning

confidence: 99%

Corporate social disclosures in the context of national cultures and stakeholder theory

Orij

2010

Acc Auditing Accountability J

247

217

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Purpose -The purpose of this study is to investigate whether corporate social disclosure levels relate to national cultures. Design/methodology/approach -The sample consisted of 600 large companies from 22 countries. Cultural measures were applied: a measure for secrecy, as proposed by Hope et al. and a newly constructed measure for generic types of cultures (Gannon), both derived from Hofstede's national culture dimensions. Two other dimensions, masculinity and long-term orientation, not part of secrecy and generic types of culture measures, were also tested separately. Findings -A number of significant statistical relationships between corporate social disclosures and cultural measures are identified. The results are consistent with the associations suggested by stakeholder theory and a country-specific stakeholder orientation. It is concluded that corporate social disclosure levels are likely to be influenced by national cultures. Research limitations/implications -The results of Van der Laan Smith et al. are largely supported. Culture is clearly related to corporate social disclosure levels, although cultural data may need refinement. Further, the potential limitations of the application of stakeholder theory for this type of study need to be taken into account. Practical implications -The outcomes can be useful to the managers of multinational corporations, when preparing corporate social disclosures. Originality/value -Instead of a comparison between two nations, as is undertaken by Van der Laan Smith et al. a scaled relationship between generic types of cultures and CSD levels is found.

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Institutional ownership and women representation on boards in three different institutional settings

Hamdan,

Barone

et al. 2024

Bus Strat Dev

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This study aims to investigate the moderating effect of country level institutional variables on the relationship between institutional ownership and board gender diversity. Using firm and country level data of three different cultural environments (Gulf Cooperation Council countries, UK, and France) for the years 2018–2019, this study concludes that institutional elements related to women (Women Tertiary education levels; legal support, Economic Participation and culture) create isomorphic pressure on firms that enhance the role of institutional owners in increasing women representation on board of directors. Other governance elements, such as ownership concentration, board independence and board size may indicate governance levels better than board gender diversity in certain institutional environments. The study recommended that board gender diversity should not be a priority for investors and portfolio managers in financial markets where reduced female labor market participation exists. Moreover, quotas may be a good tool for enhancing female representation among boards in contexts that have reduced female labor market participation and high levels of tertiary education attainment to maintain corporate sustainability.

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The Purposes and Accountability of the Corporation in Contemporary Society: Corporate Governance at a Crossroads

Cited by 150 publications

References 1 publication

The Corporate Objective Revisited

The Corporate Objective Revisited

Corporate social disclosures in the context of national cultures and stakeholder theory

Institutional ownership and women representation on boards in three different institutional settings

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