415 research outputs found
Morten Huse: Boards, governance and value creation: the human side of corporate governance
No full textThe subject of corporate governance, and particularly of board of directors, has received an increasing attention in the last decades (Lorsch, 1995). Since the ‘90s corporate governance has become a debated issue, because of its influence on the production and the distribution of value in organizations, and in the entire economic system (Zingales, 1998). Among governance issues, boards of directors are considered to be the most important one, because they are the organizational body at the apex of organizations (Fama and Jensen, 1983). In other words, they take the most important decisions for the firm’s future.
For the relevance of corporate governance, and particularly of board of directors, in our society, it is very welcome to have a new publication on the topic. The title of the book reveals that the author starts from the premise that firms are tools to create value for the stakeholders, and that board of directors should be designed to be effective and accountable, i.e. to help companies to produce more value (Zahra and Pearce, 1989). The subtitle underlines that the focus and the main theme of the book is on the human aspects of corporate governance (Mace, 1971).
This is a research-based book. It is the result of the long research experience of the author in the field of corporate governance, and particularly in the subject of boards of directors. The book is aimed at stimulating thinking on many crucial governance issues. It is not a handbook and does not provide recipes or final answers (if they exist!) to governance issues.
The book is written in the management tradition, and it draws mostly from strategy and organization theories. The author adopts a behavioral perspective on boards of directors (e.g. Finkelstein and Mooney, 2003; Forbes and Milliken, 1999; Johnson et al., 1996). He goes beyond the analysis of the structure and of the public statements of board members. The book opens the “black box” of board of directors to investigate actual board behavior and the underlying processes (inside and outside the boardroom) leading to board effectiveness and value creation (e.g. Zona, Zattoni, 2007).
The ultimate goal of the author is ambitious. It is to communicate research-based findings on boards and governance to a large audience including researchers, business school students, and directors. To accomplish this aim, he takes profit of his long experience in governance and boards from different perspectives: researching, teaching, and consulting
The Structure of Corporate Groups: the Italian case
No full textLarge firms all over the world conduct their business through a number (tens or hundreds) of subsidiaries and associated companies, the single company that conducts its business without equity ties with other firms is nowadays the legal form adopted only by small enterprises. The corporate group is typical not only of developing countries such as Nicaragua or India, or of countries of late industrialisation such as Germany and Japan, but it is also the usual legal structure adopted in Anglo-Saxon countries such as the United States and the United Kingdom (Strachan, 1976; Chandler, 1982; Goto, 1982; Encaoua, Jacquemin, 1982; Tricker, 1984; Wymeersch, 1994; etc.)
There are many reasons why firms adopt this complex structure: to minimise tax burdens, to follow the internationalisation process, to isolate the risks involved in certain activities or businesses, to take advantage of some legal regulations, and so on (Bonbright, Means, 1932; Hadden, 1984; Tricker, 1994; Zattoni, 1997; etc.). Depending on the objectives pursued, managers can create separate legal entities to govern single functions of the firm (production, sales, R&D, etc.), single businesses (insurance, manufacturing, services, etc.) or parts of businesses (products, brands, geographical areas, etc.).
Previous studies show that corporate groups tend to be characterised by company structures that differ according to the country of incorporation of the parent companies. This means that groups with parent companies located in the same country tend to have homogeneous characteristics (organisational isomorphism) and that groups located in different countries have different features. In other words, the legal, social and cultural institutions of the host country seem to have a great influence on company structure.
That being said, the main aim of this article is to describe the characteristics of large firms in Italy and to analyse the reasons that lead to the adoption of a complex company structure. With this aim in mind, the first part of this article will describe the characteristics of large Italian firms in terms of structure of control and ratio of shares owned by the main shareholder, comparing them with other countries; the second part of the article will analyse the typical company structure adopted by large Italian firms, explaining the reasons that justify such widespread use of pyramidal (or hierarchical) holding companies in this country. Finally, the consequences that this structure has had on the performance of groups and on the Italian economic system will be discussed, with some insights on future trends
Introduction
No full textThe main objective of this introductory chapter is to present
the theoretical framework and the main results of the empirical study that aimed to explore corporate governance mechanisms at national and cross-national levels. In particular, we start with an overview of the inter-disciplinary field of corporate governance. Next, we discuss the initial public offering event by way of background for the remainder of the book. In addition, we discuss how internal and external corporate governance mechanisms act and interact to influence the IPO event. Finally, we conclude with our cluster analysis of the twenty-one economies along prominent corporate governance mechanisms in order to begin to think about how national economies are similar and different as they seek to reconcile the many economic and social interests associated with the initial public offering even
Introduction
No full textThe main objective of this introductory chapter is to present
the theoretical framework and the main results of the empirical study that aimed to explore corporate governance mechanisms at national and cross-national levels. In particular, we start with an overview of the inter-disciplinary field of corporate governance. Next, we discuss the initial public offering event by way of background for the remainder of the book. In addition, we discuss how internal and external corporate governance mechanisms act and interact to influence the IPO event. Finally, we conclude with our cluster analysis of the twenty-one economies along prominent corporate governance mechanisms in order to begin to think about how national economies are similar and different as they seek to reconcile the many economic and social interests associated with the initial public offering even
Introduction
No full textThe main objective of this introductory chapter is to present
the theoretical framework and the main results of the empirical study that aimed to explore corporate governance mechanisms at national and cross-national levels. In particular, we start with an overview of the inter-disciplinary field of corporate governance. Next, we discuss the initial public offering event by way of background for the remainder of the book. In addition, we discuss how internal and external corporate governance mechanisms act and interact to influence the IPO event. Finally, we conclude with our cluster analysis of the twenty-one economies along prominent corporate governance mechanisms in order to begin to think about how national economies are similar and different as they seek to reconcile the many economic and social interests associated with the initial public offering even
La retribuzione dei consiglieri di amministrazione: un'analisi empirica sulle società quotate italiane
No full textIntegrating agency and resource dependence theory: Firm profitability, industry regulation, and board task performance
No full textBoards of directors are key governance mechanisms in organizations and fulfil two main tasks: monitoring managers and firm performance, and providing advice and access to resources. In spite of a wealth of research much remains unknown about how boards attend to the two tasks. This study investigates whether organizational (firm profitability) and environmental factors (industry regulation) affect board tasks performance. The data combine CEOs’ responses to a questionnaire, and archival data from a sample of large Italian firms. Findings show that past firm performance is negatively associated with board monitoring and advice tasks; greater industry regulation enhances perceived board tasks performance; board monitoring and advice tasks tend to reinforce each other, despite their theoretical and practical distinction
European Management Model: A Reality or a Chimera?
No full textThis essay attempts to address a simple but fundamental question for European business
leaders and management scholars: is there a distinct European-based management model? More
specifically, is there a single framework of management principles and practices that guides
European companies? To address this open question, the article begins with a summary of the
debate on this topic, which is divided into proponents and critics, and then analyzes the evolution
of European policies, business schools, and academic societies over the past decades. In the final
section, the author presents his view on the existence of a European management model, and
invites European policymakers, companies, and schools to promote the emergence of world-class
companies and organizations rooted in European culture and values
Stock incentive plans in Europe: empirical evidence and design implications
No full textTraditionally, stock incentive plans have been used by American companies for two primary purposes: as tools of corporate governance to align the interests of top managers and shareholders, and to motivate managers to maximize shareholders’ value. Recently, just as the misuse of stock option plans is the subject of scathing criticism, such plans are seeing widespread dissemination in several European countries. Empirical studies conducted by both consulting companies and management scholars outline the increasing diffusion of stock incentive plans designed by European companies and the main features of these plans. The characteristics of the process through which they are designed and of the equity incentives implemented raise the concerns of investors and academics about the ability of such plans to align managers’ interests to shareholders’.
Since stock incentive plans were created and developed in the Anglo-Saxon capitalistic system, the last part of the paper reviews the reasons why firms should set up these plans. The aim is to ascertain whether European companies have good reasons to create SIPs and if the features of the incentive plans designed by these executives are consistent with achieving these goals. To answer these questions, a theoretical model is presented to provide a framework for designing stock incentive plans that are tailored to the characteristics of the company, specific aims it wishes to pursue, and the relative institutional environment
Who Should Control a Corporation? Towards a Contingency Stakeholder Theory for Allocating Ownership Rights
No full textA number of companies allocate ownership
rights to stakeholders different from shareholders,
despite the fact that the law attributes these rights to the
equity holders. This article contributes to an understanding
of this evidence by developing a contingency
model for the allocation of ownership rights. The model
sheds light on why companies, despite pressures from the
law, vary in their allocation of ownership rights. The
model is based on the assumption that corporations
increase their chance to survive and prosper if the stakeholders
supplying ‘‘critical contributions’’ receive the
ownership rights. According to the model, ‘‘critical’’
contributions involve (1) contractual problems due to
specific investments, long-term relationships, and low
measurability; (2) the assumption of the uncertainty
resting on the company; and (3) the supply of scarce and
valuable resources. The model is dynamic because it also
provides a basis for understanding why the allocation of
ownership rights changes with time. Finally, the article
presents the strategies companies can use to realize an
efficient distribution of ownership rights among their
stakeholders
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