How to Govern Corporations so they Serve the Public Good: A Theory of Corporate Governance Emergence
HOW TO GOVERN CORPORATIONS SO THEY SERVE THE PUBLIC GOOD: A THEORY OF CORPORATE GOVERNACE EMERGENCE, Edwin Mellen Press, 2009
Posted: 16 Mar 2010
Date Written: November 21, 2009
The widely recognized failure of corporate governance in the late twentieth century and early twenty-first century parallels the severe limitations of mainstream theoretical models of corporate governance. The dominant shareholder perspective and the competing stakeholder perspective presuppose a rather static and entitative conception of the corporation, which underpins the very influential claims of optimal, efficient and universal forms and structures of governance. However, little evidence support the claimed superiority of either shareholding or stakeholding model, either market-oriented or hierarchical governance, either internal or external control, and either self-regulation or state regulation, as well as such prevailing assumptions as rationality and efficiency.
The fundamental limitation of the entitative and static modes of thinking in corporate governance is that corporate governance has been abstractly theorised out of the concrete processes of time, space and its context. Until now, little attention has been paid to the underlying philosophical premises and the long-unresolved difficulties of substantialism and representationalism behind the dominant modes of analyses.
Aiming at overcoming the limitations of contemporary corporate governance thinking, this book provides an alternative processual perspective in understanding the fluidity, complexity and heterogeneity of corporate governance realities. Two conceptual models are presented in the book. The first is a three-dimensional process model of corporate governance, which ontologically highlights the corporate governance reality as a continually developing and contextualised network of interrelationships and interactions. The second is a dual process model of corporate governance construction, which conceives the social construction of corporate governance as a result of dialectical fusion of experiential-practical process and ideal-constructive process in which contestable ideologies, conventions and beliefs play a key role.
Keywords: corporate governance, shareholder model, stakeholder model, process philosophy
JEL Classification: G34, P12
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