Klein, Michael2014-07-282014-07-282013-09-26https://hdl.handle.net/10986/19037Ever since the rise of large firms in the 18th century, debate has been raging about how to combine economic efficiency and productivity with socially desirable behavior of firms. This paper reviews the debate starting with the classic corporate governance argument about shareholder rights. It discusses the potential incentives to exploit other stakeholders unduly and examines some mechanisms, beyond contracts and regulation, to cope with this exploitation. In this light it considers reputational mechanisms, using the example of corporate social responsibility, and changes to the constitution of firms, with emphasis on the nonprofit form of enterprise. Based on evidence so far, the for-profit firm with mechanisms assuring sound shareholder rights remains preferable to the alternatives. However, scope for experimentation with mechanisms such as different classes of shareholders with differing voting rights may be socially useful, which suggests that global corporate governance principles thus should not be prescriptive in detail.en-USCC BY 3.0 IGOACCOUNTINGACCOUNTING STANDARDSAGENCY PROBLEMAGENTS OF SHAREHOLDERSASSET MANAGERASYMMETRIC INFORMATIONBANKRUPTCYBANKSBIDBOARD MEMBERSBONDSBORROWERBUYBACKSCASH FLOWCEOCEOSCHECKSCHIEF EXECUTIVECOLLATERALCOMMITMENT DEVICESCOMPANIES ACTCOMPANY LAWCOMPETITIVE MARKETSCONFLICTS OF INTERESTCONTRACTUAL SAVINGCONTROLLING MINORITYCONTROLLING SHAREHOLDERSCOOPERATIVESCORPORATE BEHAVIORCORPORATE CONDUCTCORPORATE EXECUTIVESCORPORATE FINANCECORPORATE FORMCORPORATE GOVERNANCECORPORATE GOVERNANCE MECHANISMSCORPORATE GOVERNANCE PRINCIPLESCORPORATE GOVERNANCE STANDARDSCORPORATE ORGANIZATIONCORPORATE RAIDERSCORPORATE SCANDALSCORPORATE SOCIAL RESPONSIBILITYCORPORATE STRUCTURECORPORATIONCORPORATIONSCOST OF CAPITALCREDIBILITYCREDIT DEFAULTCREDIT DEFAULT SWAPSCREDITORSCUSTODYDEBTDEBT CONTRACTDEBT CONTRACTSDEBT MARKETSDEBT OBLIGATIONSDEBT SERVICEDEBT SERVICE PAYMENTSDEFAULT RISKDEFAULTSDERIVATIVEDEVELOPING COUNTRIESDIVIDENDDIVIDEND FIRMSDIVIDEND PAYMENTSDIVIDENDSECONOMIC EFFICIENCYEMERGING MARKETSEMPLOYMENT CONTRACTSENFORCEMENT SYSTEMEQUITY CONTRIBUTIONSEQUITY MARKETSEQUITY SECURITIESETHICAL BEHAVIOREX ANTEEX POSTEXCESS RETURNEXPENDITURESEXTERNAL FINANCEFAMILY BUSINESSESFAMILY FIRMSFIDUCIARY DUTYFINANCE CORPORATIONFINANCESFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL PERFORMANCEFINANCIAL RISKFINANCIAL SECTORFOREIGN INVESTORSFRAUDFUND MANAGERFUND MANAGERSGLOBAL CORPORATE GOVERNANCEGOOD CORPORATE GOVERNANCEGOVERNANCE ARRANGEMENTSGOVERNANCE STANDARDSGOVERNMENT POLICIESHOLDINGHOLDINGSHOSTILE TAKEOVERSHUMAN RESOURCEINCORPORATEDINCORPORATIONINDIVIDUALSINITIAL PUBLIC OFFERINGINSURANCEINSURANCE COMPANIESINSURANCE COMPANYINTEREST PAYMENTSINTEREST RATEINTERESTS OF SHAREHOLDERSINTERNAL FINANCEINTERNATIONAL FINANCEINVESTINGINVESTMENT FUNDSINVESTMENT OPPORTUNITIESINVESTMENT VEHICLESISSUANCEJOINT STOCK COMPANIESJOINT-STOCK COMPANIESLARGE COMPANIESLARGE SHAREHOLDERLARGE SHAREHOLDERSLEGAL FRAMEWORKLEGAL FRAMEWORKSLEGAL PROTECTIONLEGAL PROTECTIONSLIMITEDLIMITED LIABILITYLIQUIDATIONLIQUIDITYLONG-TERM INTERESTLONG-TERM INTERESTSMAJORITY OF SHARESMAJORITY SHAREHOLDERSMARKET ANALYSTSMARKET BENCHMARKSMARKET COMPETITIONMARKET INFRASTRUCTUREMICROFINANCEMINORITY INVESTORSMINORITY SHAREHOLDERMINORITY SHAREHOLDERSMOBILE PHONEMODERN BUSINESSMONETARY FUNDMONOPOLYMONOPOLY POWERSMORAL HAZARDMORTGAGEMORTGAGE MARKETMUNICIPALITIESMUTUAL FUNDSNONPROFIT AGENCIESNONPROFIT ORGANIZATIONNONPROFIT ORGANIZATIONSNONPROFIT STATUSPENSIONPENSION FUNDPENSION FUNDSPENSIONSPOISON PILLSPRICE-EARNINGS RATIOSPRINCIPAL-AGENTPRINCIPAL-AGENT PROBLEMPRIVATE PROPERTYPRIVATE SECTOR DEVELOPMENTPROTECTING MINORITY SHAREHOLDERSREGULATORY FRAMEWORKSREGULATORY REFORMSREPAYMENTRETAIL INVESTORSRETURNRETURNSRETURNS ON EQUITYRIGHT OF SHAREHOLDERSRISK PREMIUMSSAVINGSSEPARATION OF OWNERSHIPSEVERANCE PAYMENTSSHARE OF EQUITYSHARE OF INVESTMENTSSHARE VALUESHAREHOLDERSHAREHOLDER CONTROLSHAREHOLDER INTERESTSSHAREHOLDER PROTECTIONSSHAREHOLDER RELATIONSHIPSSHAREHOLDER RIGHTSSHAREHOLDER VALUESHAREHOLDERSSHAREHOLDERS RIGHTSSMALL INVESTORSSOCIETIESSOCIETYSPECIFIC INVESTMENTSPECIFIC INVESTMENTSSTAKEHOLDERSTAKEHOLDER MANAGEMENTSTAKEHOLDERSSTOCK EXCHANGESSTOCK MARKETSTOCK OPTIONSSTOCKHOLDERSSTOCKSSUBSIDIARYSUPERIOR ORGANIZATIONAL FORMSSUPERVISORY BOARDSUPERVISORY BOARDSTAKEOVERTAKEOVER BIDTAXTRADINGTRANSACTIONTRANSACTION COSTSTRANSPARENCYTREASURYTREASURY BILLSTRUSTEESWEALTH CREATIONWORLD MARKETS10.1596/19037