Cowton, Christopher J. (2008) Corporate governance and the theory of the firm: a re-assessment of shareholder primacy in the light of limited liability and the position of creditors. Working Paper. Financial Ethics and Governance Research Group University of Huddersfield, Huddersfield, UK. (Unpublished)
Download (126kB) | Preview
The neoclassical theory of the firm presents an impressive analysis in which the primacy of owners’ interests is asserted. It offers powerful insights into the contracting and monitoring challenges that arise when owners, as principals, delegate control to executive managers, their agents. This perspective has had a major impact on debates regarding corporate governance and upon programs of corporate governance reform, especially in the wake of various corporate ‘scandals’. However, through an examination of the nature of the limited liability corporation and, in particular, the position of creditors, this paper argues that the abstract theory of the firm should not be taken to imply that shareholders are the only party whose interests currently count in conventional systems of corporate governance. In this way, the paper seeks to disturb the notion of shareholder primacy, pure and simple, thus opening up possibilities for other analyses of the limited liability corporation; and it also highlights for business ethicists the significance of trade creditors and finance creditors whose interests should be recognized and considered.▼ Jump to Download Statistics
|Item Type:||Monograph (Working Paper)|
|Additional Information:||© The author, 2008|
|Subjects:||H Social Sciences > H Social Sciences (General)|
H Social Sciences > HF Commerce > HF5601 Accounting
|Schools:||The Business School|
The Business School > Financial Ethics and Governance Research Group
Berle, A.A. and G.C. Means. 1932. The Modern Corporation and Private Property. New York: Macmillan.
Blair, M.M. 1998. “For Whom Should Corporations be Run?: An Economic Rationale for Stakeholder Management,” Long Range Planning 31(2): 195-200. YET IN?
Boatright, J.R. 1999. Ethics in Finance. Malden, MA: Blackwell.
Coffee, J.C., Jr. 2006. Gatekeepers: The Professions and Corporate Governance. Oxford: Oxford University Press.
Cadbury, A. 1993. “Highlights of the Proposals of the Committee on Financial Aspects of Corporate Governance,” in Contemporary Issues in Corporate Governance, ed. D.D Prentice and P.R.J. Holland, 45-55. Oxford: Clarendon.
Cowton, C.J. and C.J. Low. 2002. “Ethical issues in purchasing,” in The Gower Handbook of Purchasing Management, Third Edition, ed. M. Day, 223-235. Aldershot: Gower.
Davies, P. 2002. Introduction to Company Law. Oxford: Oxford University Press.
Edwards, J.R. 1989. A History of Financial Accounting. London: Routledge.
Eilon, S. 1971. “Goals and Constraints,” Journal of Management Studies 8(3): 292-303.
Fisher, C. and A. Lovell. 2006. Business Ethics and Values: Individual, Corporate and International Perspectives, Second Edition. Harlow: FT Prentice Hall.
Freeman, R.E. and W.M. Evan. 1990. “Corporate Governance: A Stakeholder Interpretation,” Journal of Behavioral Economics 19(4) 337-359.
Friedman, M. 1970. “The Social Responsibility of Business is to Increase its Profits,” reprinted in An Introduction to Business Ethics, ed. G.D. Chryssides and J.H. Kaler (1993), 249-254. London: Thomson.
Hendry, J. 2001. “Missing the Target: Normative Stakeholder Theory and the Corporate Governance Debate,” Business Ethics Quarterly 11(1) 159-176.
Iwai, K. 2007. “What is Corporation? The Corporate Personality Controversy and the Fiduciary Principle in Corporate Governance,” in Legal Orderings and Economic Institutions, ed. F. Cafaggi, A. Nicita and U. Pagano, 243-267. London: Routledge.
Kay, J. 1996. The Business of Economics. Oxford: Oxford University Press.
Keasey, K., S. Thompson and M. Wright. 1997. “Introduction: The Corporate Governance Problem – Competing Diagnoses and Solutions,” in Corporate Governance: Economic, Management, and Financial Issues, ed. K. Keasey, S. Thompson and M. Wright, 1-17. Oxford: Oxford University Press.
Keay, A. and P. Walton. 2003. Insolvency Law: Corporate and Personal. Harlow: Pearson Education.
Klein, W.A. and J.C. Coffee, Jr. 1988. Business Organization and Finance: Legal and Economic Principles, Third Edition. Westbury, NY: Foundation Press.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer and R.W. Vishny 1998. “Law and Finance,” Journal of Political Economy 106(6): 1113-1155. IN PAPER?
Lucas, J.R. 1998. “The responsibilities of a businessman,” in Business Ethics: Perspectives on the Practice of Theory, ed. C. Cowton and R. Crisp, 59-77. Oxford: Oxford University Press.
Maitland, I. 2001. “Distributive Justice in Firms: Do the Rules of Corporate Governance Matter?,” Business Ethics Quarterly 11(1): 129-143.
Mallin, C.A. 2004. Corporate Governance. Oxford: Oxford University Press.
Midgley, K., ed. 1982. Management Accountability and Corporate Governance: Selected Readings. London: Macmillan.
Monks, R.A.G. and N. Minow. 2001. Corporate Governance, Second Edition. Malden, MA: Blackwell.
Orlitsky, M., F.L. Schmidt and S.L. Rynes. 2003. “Corporate Social and Financial Performance: A Meta-Analysis,” Organization Studies 24(3): 403-441.
Page, M.J. 1982. “The Price of Limited Liability – Accountability and Small Companies,” in Management Accountability and Corporate Governance: Selected Readings, ed. K. Midgley, 213-226. London: Macmillan.
Rigby, C. 2002. “Financial Aspects of Purchasing,” in The Gower Handbook of Purchasing Management, Third Edition, ed. M. Day, 75-95. Aldershot: Gower.
Ross, S.A., R.W. Westerfield, J.F. Jaffe and B.D. Jordan. 2007. Core Principles and Applications of Corporate Finance, International Edition. New York: McGraw-Hill.
Sternberg, E. 1998. Corporate Governance: Accountability in the Marketplace. London: Institute of Economic Affairs.
Tocher, K.D. 1970. “Control,” Operational Research Quarterly 21(2): 159-180.
Tricker, R.I. 1984. Corporate Governance. Aldershot: Gower.
|Depositing User:||Graham Stone|
|Date Deposited:||27 Aug 2008 09:08|
|Last Modified:||14 Nov 2011 12:14|
Available Versions of this Item
- Corporate governance and the theory of the firm: a re-assessment of shareholder primacy in the light of limited liability and the position of creditors. (deposited 27 Aug 2008 09:08)[Currently Displayed]
Downloader CountriesMore statistics for this item...
Item control for Repository Staff only: