Corporate Governance and Control

Corporate Governance and Control

Marco Becht, Patrick Bolton, Ailsa Roell

Series number :

Serial Number: 
002/2002

Date posted :

August 01 2005

Last revised :

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Keywords

  • Corporate governance • 
  • ownership • 
  • takeovers • 
  • block holders • 
  • boards

Corporate governance is concerned with the resolution of collective action problems among dispersed investors and the reconciliation of conflicts of interest between various corporate claimholders.

In this survey we review the theoretical and empirical research on the main mechanisms of corporate control, discuss the main legal and regulatory institutions in different countries, and examine the comparative corporate governance literature. A fundamental dilemma of corporate governance emerges from this overview: large shareholder intervention needs to be regulated to guarantee better small investor protection; but this may increase managerial discretion and scope for abuse. Alternative methods of limiting abuse have yet to be proven effective.

Published in

Published in: 
Publication Title: 
Handbook of the Economics of Finance
Description: 
Volume 1, 1-109

Authors

Real name: 
Fellow, Research Member, Institutional Member, Board Member
Solvay Brussels School for Economics and Management, Université libre de Bruxelles