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Corporate Governance and the Public Interest

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  • J. Robert Branston
  • Keith Cowling
  • Roger Sugden

Abstract

Corporate governance has long been a concern for industrial economists but not typically a centrepiece of policy. One reason is that policy design has been based on a market-orientated approach to the theory and impact of the firm. In contrast, this paper is rooted in a strategic decision-making perspective that makes corporate governance a central policy issue. Moreover, whereas responses to corporate scandals have focused on shareholders wronged by managers, we see the significance of corporate governance very differently. Merely to punish managers who fail shareholders is to ignore systemic failures, namely that, by design, managers are not democratically accountable to all interests in corporations' activities. The impact of modern corporations turns crucially on who governs. In practice preferences over strategy vary across actors but not all interests are currently being represented in decision making, resulting in a failure to govern in the public interest. As solutions, we consider the design of company law and also more immediate ways forward, focusing on regulation and democratically controlled public agencies. Our prime concern is the fundamental significance of active, effective citizens. Throughout, the arguments are illustrated using examples from various countries and industries.

Suggested Citation

  • J. Robert Branston & Keith Cowling & Roger Sugden, 2006. "Corporate Governance and the Public Interest," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(2), pages 189-212.
    • Handle: RePEc:taf:irapec:v:20:y:2006:i:2:p:189-212
    DOI: 10.1080/02692170600581110
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    Citations

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    Cited by:

    1. Lisa De Propris & Ping Wei, 2007. "Governance and Competitiveness in the Birmingham Jewellery District," Urban Studies, Urban Studies Journal Limited, vol. 44(12), pages 2465-2486, November.
    2. Christos Pitelis, 2013. "Towards a More ‘Ethically Correct’ Governance for Economic Sustainability," Journal of Business Ethics, Springer, vol. 118(3), pages 655-665, December.
    3. Pitelis, Christos N & Tomlinson, Philip R, 2017. "Industrial organisation, the degree of monopoly and macroeconomic performance – A perspective on the contribution of Keith Cowling (1936–2016)," International Journal of Industrial Organization, Elsevier, vol. 55(C), pages 182-189.
    4. Silvia Sacchetti, 2015. "Inclusive and Exclusive Social Preferences: A Deweyan Framework to Explain Governance Heterogeneity," Journal of Business Ethics, Springer, vol. 126(3), pages 473-485, February.
    5. Andrea Coveri & Claudio Cozza & Dario Guarascio, 2021. "Monopoly Capitalism in the Digital Era," Working Papers in Public Economics 209, Department of Economics and Law, Sapienza University of Roma.
    6. Christos Pitelis, 2022. "Big tech and platform-enabled multinational corporate capital(ism): the socialisation of capital, and the private appropriation of social value," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(6), pages 1243-1268.
    7. Paul Olojede & Olayinka Erin, 2021. "Corporate governance mechanisms and creative accounting practices: the role of accounting regulation," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(3), pages 207-222, September.
    8. J. Robert Branston & Lauretta Rubini & Roger Sugden & James Wilson, 2006. "The healthy development of economies: A strategic framework for competitiveness in the health industry," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 301-329.
    9. Malida Mooken & Roger Sugden, 2014. "The Capabilities of Academics and Academic Poverty," Kyklos, Wiley Blackwell, vol. 67(4), pages 588-614, November.

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