The separation of ownership and control has always been central in corporate governance debates. A large body of literature has sought to show that control-enhancing arrangements can deter investors. However, the experience of the last few years has suggested that companies with widely dispersed ownership can suffer from their own issues ? not least short-termism.
So, is ownership structure really the dividing line between ?good? and ?bad? governance that many commentators suggest? This short essay suggests that policymakers, academics and practitioners should be careful in deriving conclusions about the most effective ownership and control structures. Ownership is firm-specific and varies across life cycle stages, sectors, regions, countries and cultures. Ownership structures are also dynamic in that they (should) change over time according to evolving markets and shifting business strategies and practices.
Startup founders, who generally must cede control to obtain VC financing, are widely believed to regain control in the event of an IPO, à la Facebook’s Mark Zuckerberg. Indeed, the premise that founders expect to be able to reacquire control if...Read more
Using corporate social responsibility (CSR) ratings of 34,117 corporate customer-supplier relationships from 50 countries worldwide, we find that customers' CSR ratings are associated with suppliers' subsequent CSR performance, but not vice versa...Read more
French listed companies can issue shares that confer two votes per share after a holding period of at least two years (loyalty shares with tenure voting rights). In 2014 the default rule changed from one-share-one-vote to loyalty shares. The...Read more
Short-termism has become a serious concern for corporate governance, and this has inspired a search for institutional arrangements to promote long-term decision-making. In this paper, we call attention to long-term ownership by industrial...Read more