Corporate Governance Theories: From Micro Theories to National Systems Theories

Abstract

The objective of this article is to conduct a survey of the different corporate governance theories. In the first part, we present the micro theories by opposing the disciplinary view to the knowledge-based view. The second part deals with the macro or national systems theories. We separate the theories based on appropriation of the organizational rent from those attributing a dominant role to production. This survey highlights that the financial view of corporate governance is a very particular case and presents many limits.

Corporate Governance and Profitability of Listed Food and Beverages Firms in Nigeria

“…Charreaux (2004) believes the state to be an essential 6, No.3, 2016 link for political direction of a business enterprise. This is because every emerging firm is as a result of existing political framework put in force by the governance structure.…”

“…Thus, political theory of governance seems to regulate markets to ensure the convergence of both public and private interests. It brings coherence between protection of investors, employees and competitive character of the goods and services markets (Charreaux, 2004). It centres on the political economy of corporate governance.…”

“…Accordingly, having a political influence in corporate governance may direct corporate governance within the organization. According to Charreaux (2004), political theory creates productive efficiency through protection of shareholders' interests and reduction of costs of opportunism but not those of management errors. According to Roe (2003), political forces account for the difference in choice of corporate governance modes among advanced industrial countries.…”

Organising the Firm

“…As Table 6.1 (part of a more complete table published in Charreaux 2004) shows, there are different ideas about the interests that should be served. For example, one can distinguish between: the manager-oriented model; the labour-oriented model; the state-oriented model; stakeholder-oriented models; and the shareholder-oriented model.…”

Board Independence, Corporate Governance and Earnings Management in France

“…Thus, Charreaux (2004) distinguishes two main categories of theories in this area: contractual and strategic theories. Contractual theories are aimed at disciplining corporate managers and protecting shareholders' interests, whereas strategic theories aim essentially at wealth creation, particularly through the creation of knowledge, skills, etc.…”