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The Global History of Corporate Governance
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Capitalism at the beginning of the twenty-first century is a variegated collection of economic systems. In America, capitalism is a system where a huge number of independent corporations compete with each other for customers. Monopolies are illegal, though the courts are sometimes an im- perfect safeguard against them. Each corporation has a chief executive officer (CEO) who dictates corporate policies and strategies to a largely passive board of directors. The true owners of America’s great corpora- tions, millions of middle-class shareholders, each owning a few hundred or a few thousand shares, are disorganized and generally powerless. Only a handful of institutional investors accumulate large stakes—3 or even 5 percent of an occasional large firm’s stock—that give them voices loud enough to carry into corporate boardrooms. Corporate CEOs use or abuse their considerable powers in accordance with their individual political, so- cial, and economic beliefs. In much of the rest of the world, capitalism is a system where a handful of immensely wealthy families control almost all of a country’s great corporations, and often its government to boot. Compe- tition is largely a mirage, for few firms are genuinely independent. Profes- sional managers are hired help, subservient to oligarchic family dynasties that jealously safeguard their power, sometimes at great cost to their host economies.
The purpose of this volume is to explore how capitalism came to mean, and to be, such different things in different parts of the world. How did some economies come to entrust the governance of their great corpora- tions to a handful of old moneyed families, while others place their faith in professional CEOs?
Such different usages of the word capitalism make for difficult commu- nication. American economists are often baffled by the reluctance of seem- ingly well-educated foreigners to embrace the tenets of free enterprise, and foreign economists marvel at the naive simplicity of their American col- leagues. In fact, each would do well to take the other more seriously. The rest of the world is not simply like America, but usually poorer to varying degrees. Different countries’ economies are organized in very different ways, and corporate governance—that is, decisions about how capital is allocated, both across and within firms—is entrusted to very different sorts of people and constrained by very different institutions.
Randall K. Morck - Personal Name
1st Edtion
0-226-53680-7
NONE
The Global History of Corporate Governance
Corporate Governance
English
2005
1-70
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