Governors and directors: Competing models of corporate governance

Abstract

Why do we use the term ‘corporate governance’ rather than ‘corporate direction’? Early British joint stock companies were normally managed by a single ‘governor’. The ‘court of governors’ or ‘board of directors’ emerged slowly as the ruling body for companies. By the nineteenth century, however, companies were typically run by directors while not-for-profit entities such as hospitals, schools and charitable bodies had governors. The nineteenth century saw steady refinement of the roles of company directors, often in response to corporate scandals, with a gradual change from the notion of the director as a ‘representative shareholder’ to the directors being seen collectively as ‘representatives of the shareholders’. Governors in not-for-profit entities, however, were regarded as having broader responsibilities. The term ‘governance’ itself suggests that corporate boards should be studied as ‘political’ entities rather than merely through economic lenses such as agency theory.

Disciplinary power in corporate governance: A Foucauldian analysis of the emergence and development of proxy advisors

“…This article contributes to the literature on corporate governance in several ways. First, it answers the call for more historical studies in corporate governance (Lai et al, 2019) and contributes to enhancing our understanding of the evolution of corporate governance (Cheffins, 2013; Ocasio and Joseph, 2005; Shah and Napier, 2019). As argued by Lai et al (2019: 329), ‘historical studies on governance may provide visibility to the social processes and ideologies that explain how capitalism evolved (Walker, 2016), thereby extending our knowledge of contemporary forms of governance’.…”

“…First emerging in the 1970s (Ocasio and Joseph, 2005; Shah and Napier, 2019), corporate governance has gone through tremendous changes during the past decades. Codes of corporate governance have flourished worldwide (Roberts, 2001a), issues of executive compensations (e.g.…”

Accounting and governance in diverse settings – an introduction

“…The issue opens with a central theme in the accounting and governance debate in historical perspective, which is explored in the article by Neeta Shah and Christopher J Napier (2019), who examine how ‘corporate governance’ came to dominate modern discourse, although this term remained rarely adopted until the 1970s. In their investigation, Shah and Napier (2019) show that in early chartered companies, the most senior individual was usually named the ‘governor’, who joined many of the features of modern board chairman and chief executive officer. Governors were elected directly from the members of the organisation, and this title was granted to anyone who had provided relevant funds to the organisation.…”

“…However, they were not referred to as directors until the late seventeenth century. The adoption of ‘corporate governance’ as a general expression only became apparent in the 1970s and is intended to portray the idea that ‘directing and managing companies is a political process as much as, if not more than, a process of rational organisation’ (Shah and Napier, 2019: 338–355). Following this argument, Shah and Napier underline that the lens of economic theories (e.g.…”

Governance and accounting practices in the Fugger family firm at the beginning of the sixteenth century

“…In their article, Shah and Napier (2019) traced the evolution of the term “governance” with respect to commercial enterprises in Great Britain beginning in the sixteenth century. The focus of Shah and Napier was on the governance of British joint-stock limited liability companies and the relationships between shareholders, managing directors, and “governors” (i.e.…”