Marc T. Moore

“Whispering Sweet Nothings”: The Limitations of Informal Conformance in UK Corporate Governance

The principle of “comply or explain” lies at the heart of the UKs Combined Code on Corporate Governance, and is a characteristic feature of the unique London approach to financial market regulation. Over recent years, however, the practical effectiveness of this concept has arguably been undermined by a number of factors. This article assesses three particular challenges to the continuing operation of the “comply or explain” principle: (i) the increased prescriptiveness of the Code over recent years; (ii) the commonality of “box ticking” approaches by institutional investors towards their task of monitoring Code compliance; and (iii) the inclination of boards to produce perfunctory or “boiler-plate” corporate governance statements that fail to reference company-specific circumstances. The article seeks to demonstrate that, taken together, these factors jeopardise the Codes characteristic flexibility and, in turn, undermine its purported capacity to engender the design of effective, performance-enhancing boards on an individual company level. On this basis, the article makes some suggestions for regulatory reform that it is hoped will provide a framework for continuing policy discussions concerning the future development of the Code.

Revitalizing the institutional roots of Anglo-American corporate governance

Abstract Over the past three decades, the topic of corporate governance has become an increasingly high-profile aspect of social-scientific scholarship, in both the Anglo-Saxon world and continental Europe. To a significant extent, however, the conceptual boundaries of the corporate governance debate have been set narrowly in accordance with the logic and language of the dominant ‘agency’ paradigm of governance. According to agency theory, the central problem of corporate governance is the question of how to minimize the (harmful) consequences of the separation of ownership and control within public companies first identified by Berle and Means (1932), by reference to competitive market pressures coupled with market-based incentive and disciplinary mechanisms. In this article, we present an alternative interpretation of the corporate governance problem premised on the logic and language of institution rather than the market, which we argue is both more empirically relevant and conceptually defensible than the dominant agency paradigm. To this end, we rely on some fundamental and longstanding doctrines of Anglo-American corporate law in conjunction with recent developments in the economic theory of the firm. According to the proposed ‘institutional’ model of corporate governance, the central governance problem is that of how to exploit, rather than minimize, the (beneficial) consequences of the separation of ownership and control, so as to engender the development of a more sustainable system of governance than that emanating from the free interplay of (stock) market forces. After setting out the key conceptual underpinnings of our revived institutional model, we analyse how worker involvement in corporate decision-making might be advanced as a way of instrumentalizing this framework within firm-level governance practices.

What Is Corporate Governance

Gute Corporate Governance ist bei der EnBW wesentlicher Bestandteil der Unternehmenskultur. Wir sind davon überzeugt, dass eine verantwortungsvolle und transparente Unternehmensführung das Vertrauen von Kunden, Kapitalgebern, Mitarbeitern und der Öffentlichkeit in das Unternehmen stärkt und zum langfristigen Unternehmenserfolg beiträgt. Vorstand und Aufsichtsrat haben den Anspruch, die Unternehmensleitung und -überwachung über die bloße Erfüllung gesetzlicher Vorgaben hinaus an anerkannten Maßstäben guter Unternehmensführung auszurichten und im Einklang mit den Prinzipien der sozialen Marktwirtschaft für den Bestand des Unternehmens und seine nachhaltige Wertschöpfung zu sorgen. Daher entspricht die EnBW auch sämtlichen Empfehlungen des Deutschen Corporate Governance Kodex ( www.enbw.com/corporate-governance).

Why is Labour External to Anglo-American Corporate Governance?

This paper reconsiders the orthodox Anglo-American understanding of labour as a constituency situated outside of the core corporate governance domain. It challenges the dominant neo-classical theory of the firm, which asserts that shareholders are in general the only group of ‘incomplete’ contractors deserving of compensatory governance rights, by demonstrating that the entitlements of employees are likewise contingent to a significant extent on management’s extra-contractual discretionary prerogative. It further explains why, notwithstanding their common status in the above regard, labour is not formally answerable to by management in the way that shareholders are. Finally, it asserts that labour’s general exclusion from consideration or representation within Anglo-American corporate governance is economically defensible only to the extent that traditional collective-adversarial responses to employer power are vigorously protected within industrial relations law.