Joseph A. McCahery

Corporate Governance Regimes : Convergence and Diversity

Corporate Governance Regimes addresses corporate laws leading question: whether one or another corporate law regime possesses relative competitive advantage. To this end, the editors have brought together an international team of scholars in economics and law to critically assess the new theories of ownership and control which seek to explain the important efficiency advantages of dispersed ownership and the inevitable limitations of control-oriented systems of governance. Contributors describe and analyse the relative strength of the forces that shape the evolution of corporate law rules and practice. They also raise the issue of whether nations undertaking reforms should develop corporate governance policies that borrow from other systems best practices, or pursue a course of internally designed corporate governance reforms. And, building on new theories of law and finance, they examine the incentives for introducing meaningful corporate governance reforms that disrupt or destabilize Europes blockholding regimes. The collection is divided into seven parts. Part One provides not only a means for assessing the key features of market- and control-based systems of governance but a standpoint for determining whether national governance systems are likely to converge on a single, optimal system of governance. Part Two introduces the reader to the building blocks of European corporate governance and the securities law harmonization program. Part Three examines the complex ownership and control structures that are found in Western Europe, investigating the consequences of large shareholdings for minority investors. Part Four offers law and finance analyses of the relationship between legal and financial systems and corporate performance. Part Five looks at the economic perspective on the operation of the market for corporate control and the key legal rules and institutions of the bankruptcy and insolvency regimes in the USA and Britain. Part Six is devoted to exploring the economic effect of institutional shareholder participation in corporate governance in the USA, Britain, and continental Europe. The final section, Part Seven, evaluates empirically the executive compensation arrangements in the USA, Britain, and continental Europe. The contributions supply a pool of current research on the motivational effect of performance-related remuneration and the substantial increase in top executive remuneration in the USA. Contributors to this volume - J. McCahery and L. Renneboog W. Bratton and J. McCahery H. Hansmann and R. Kraakman J. Coffee M. Roe B. Cheffins K. Hopt T. Raaijmakers E. Wymeersch M. Goergen and L. Renneboog E. Boehmer P. Moerland I. Dherment and L. Renneboog W. Carlin and C. Mayer D. Lombardo and M. Pagano E. Perrotti and E. L. von Thadden M. Maher and T. Andersson C. Robinson, J. Rumsey, and A. White J. Franks, C. Mayer, and L. Renneboog J. Franks and W. Torous U. Hege and P. Mella-Barral L. Bebchuk R. Romano G. Stapledon and J. Bates M. Faccio and M. Lasfer M. Conyon and K. Murphy R. Crespi, C. Gispert, and L. Renneboog P. Duffhues, R. Kabir, G. Mertens, and P. Roosenboom

The Balance between Exploration and Exploitation in the “New” Venture Capital Cycle: Opportunities and Challenges

Abstract nThere is arguably a balance between exploration and exploitation within a commercial organization which leads to sustainable growth and value creation. Exploratory activities are associated with search, innovation, risk-taking and experimentation. Activities, such as selection, implementation and execution are considered exploitative in nature. We show that the governance structures and mechanisms that are typically employed in venture capital-backed companies ensure an optimum balance between the exploratory behavior of entrepreneurs and the exploratory focus of venture capitalists. New players in the venture capital cycle, such as crowdfunding platforms and corporate venture capital units, often fail to understand the importance of the interaction and interrelation between the apparently opposing exploratory and exploitative activities. However, collaborative venture capital models that are currently emerging appear to restore the necessary equilibrium in the “new” venture capital cycle.