Part IV - Implications for corporate governance

Summary

We have painted an explicitly political picture of the corporation, one in which the principal actors, shareholders and managers, negotiate over strategy against the background of their own particular values and methods, as well as their substitutability. Such a political or even politicized view of the corporation naturally has significant implications for corporate governance, as it pertains directly to the question of who is in charge. Along the way, we have pointed out how changes in ownership, management, and strategy can put strains on the systems of corporate governance in place: changes in ownership, by changing the balance of power among different types of shareholders, may render existing understandings about the direction of the firm immaterial; changes in management may lead to long-term shifts in how the firm is run; and changes in strategy can trigger risks that the firm’s governance infrastructure cannot adequately capture or address. In this concluding section, we will elaborate on the implications of our perspective for the institutions of corporate governance, with a special focus on the board of directors (Chapter 8), and the different interests behind strategic decision-making (Conclusion).