Corporate Governance, Information and Control

Sergio Scandizzo

From Ronald Coase’s seminal paper on the nature of the firm (Coase, 1937) to Berle and Means’ analysis of the management/ownership separation (Berle and Means, 1932), from the development of agency theory to modern stakeholder theory, corporate governance thinking has followed the evolution of modern corporations and of their role in capitalistic societies. This chapter will therefore survey some of the most important ideas related to corporate governance starting from its definitions, examining the main determinants of various governance systems and arguing that information, and lack thereof, plays a key role in how corporations are controlled and managed.

WHAT IS CORPORATE GOVERNANCE?

The word governance is derived from the Greek κυβερνάν, which literally means “to steer”, and was originally used with a political meaning by Plato in The Republic as well as by several other ancient philosophers (Naddaf, 2005). That the term “corporate governance”, derived by analogy with the governance of nations, has become of common use in scholarly literature and in political debates alike is just one sign of how modern corporations have acquired an importance comparable to that of nations

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