Corporate Governance and Human Resource Management

In seeking to compare the consequences of different corporate governance regimes around the world, an initial focus was on overall growth consequences. However, given that different types of national corporate governance regime appear to do better than others at specific times, and the great variations in national development within the main broad national corporate governance families, there has been a growing interest in the specific effects on the firm itself [Morgan et al., 2010], rather than seeing it as a transmission belt between relative owner and stakeholder rights on the one hand, and macro-economic outcomes on the other hand [La Porta et al., 1997, 1999, 2000]. At the simplest, such analysis has sought to interpose relative worker rights and social protection under the law as a variable that might dilute owner rights, diverting firms from a shareholder value maximisation agenda [Botero et al., 2004]. However, this goes little beyond simple hierarchical models that suggest that a single institutional feature underwriting property rights can explain everything of significance that goes on in the firm. So a growing body of applied work looks at the consequences of dominant corporate governance regimes for a key stakeholder grouping that has sunk human capital within the firm. Indeed, arguments are made for a re-evaluation of types of institutional arrangement and associated patterns of firm finance in relation to what might best explain particular sets of HRM and employment practices, and the direct effect on organisational performance, alongside how this might affect overall economic growth [Goergen et al., 2012, Gospel and Pendleton, 2003, Black et al., 2008, Pendleton, 2005]. There are many different dimensions to national corporate governance regimes, encompassing the legal, the political, the economic, and, indeed, embedded patterns of social behaviour; there is much debate within the literature as to which is the most important aspect of each.