Corporate Governance: The Role of Other Constituencies

Arbeitspapier

The paper discusses the role of various constituencies in the corporate governance of a corporation from the perspective of incomplete contracts. A strict shareholder value orientation in the sense of a rule that at any time firm decisions should be made strictly in the interest of the present shareholders would make it difficult for the firm to establish long-term relationships as the potential partners would have to fear that, at a later stage of the co-operation, the shareholders or a management acting only on their behalf could exploit them because of the inevitable incompleteness of long-term contracts. One way of mitigating these problems is to put in place a corporate governance system which gives some active role to the other stakeholders or constituencies, or which makes their interests a well-defined element of the objective function of the firm. A commitment not to follow a policy of strict shareholder value maximization ex post can be efficient ex ante. Such a system would clearly differ from what is advocated by proponents of a stakeholder approach, as it would limit the rights of the other constituencies to those which would have been agreed upon in a constitutional contract concluded between them and the founder of the firm at the time when long-term contracts are first established.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper Series: Finance & Accounting ; No. 3

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Firm Behavior: Theory ; Organizational Behavior; Transaction Costs; Property Rights ; Business Objectives of the Firm
• Thema: corporate governance ; incomplete contracts ; theory of the firm ; Corporate Governance ; Unternehmensverfassung ; Theorie der Unternehmung ; Unvollständiger Vertrag ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Schmidt, Reinhard H.
• Ereignis: Veröffentlichung
• (wer): Johann Wolfgang Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften
• (wo): Frankfurt a. M.
• (wann): 1997

Weitere Informationen

• Handle: http://hdl.handle.net/10419/76913
• URN: urn:nbn:de:hebis:30-16584
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ