Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One
This private sector opinion seeks to demonstrate that while conventional governance mechanisms can be highly effective in many situations, they are not appropriate remedies in all contexts. In some cases, the prescribed medicine actually exacerbate...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2009/06/11503811/uses-limits-conventional-corporate-governance-instruments-analysis-guidance-reform-part-one http://hdl.handle.net/10986/11114 |
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okr-10986-11114 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
ACCESS TO INFORMATION ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ACCOUNTING STANDARDS ACQUISITIONS AGENCY PROBLEMS ARTICLES OF ASSOCIATION ASSET MANAGEMENT AUDIT COMMITTEE AUTHORITY BAD FAITH BANK HOLDING BANKS BOARD MEETINGS BOARD MEMBERS BOARD MEMBERSHIP BUSINESS JUDGMENT RULE BUSINESS UNIT BUSINESS UNITS CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CASH FLOW CASH FLOWS CD CEO CEOS CHAIRMAN AND CEO CHIEF EXECUTIVE CODE OF CONDUCT COLLECTIVE COLLECTIVE ACTION COMMERCIAL RELATIONSHIPS COMPANY COMPANY INFORMATION COMPANY LAW COMPENSATION POLICY COMPETITORS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONGLOMERATE CONSENSUS CONTROLLING SHAREHOLDERS CORPORATE EXECUTIVES CORPORATE GOVERNANCE CODES CORPORATE GOVERNANCE REFORM CORPORATE GOVERNANCE REFORMS CORPORATE GOVERNANCE REGIME CORPORATE GOVERNANCE REGIMES CORPORATE GOVERNANCE SYSTEM CORPORATE OFFICERS CORPORATE PERFORMANCE CORPORATE SCANDALS CORPORATION CORPORATIONS COUNTRY TO COUNTRY CREDIT RATING CREDIT RATING AGENCIES CREDIT RATINGS DEBT DEBT ISSUES DECISION-MAKING DEPOSIT DERIVATIVE DERIVATIVES DEVELOPING MARKETS DIRECTOR LIABILITY DISCLOSURE DISCLOSURE REQUIREMENT DISCLOSURE REQUIREMENTS DISSEMINATION OF INFORMATION DIVIDENDS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC REFORM ECONOMIC STRESS EMERGING MARKET EMERGING MARKETS EMPLOYMENT ENABLING ENVIRONMENT ENTREPRENEURSHIP EQUITY HOLDERS EQUITY MARKETS ESCROW EXCHANGE COMMISSION EXPANSION EXPOSURE FAIR PRICE FAIR VALUE FIDUCIARY OBLIGATIONS FINANCE CORPORATION FINANCIAL ADVISER FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL HEALTH FINANCIAL INCENTIVES FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL RESULTS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEM FIRM SIZE FIRMS FOREIGN PORTFOLIO FOREIGN PORTFOLIO INVESTORS FRAUD GENERAL PARTNERSHIP GLOBAL CORPORATE GOVERNANCE GLOBAL INVESTOR GLOBAL INVESTORS GOVERNANCE ARRANGEMENTS GOVERNANCE GUIDELINES GOVERNANCE ISSUES GOVERNANCE MECHANISMS GOVERNANCE PRACTICES GUARANTOR HOLDING COMPANY HOLDINGS HUMAN RESOURCES INCOME INCOME TAXES INDEPENDENT BOARDS INDEPENDENT DIRECTOR INDEPENDENT DIRECTORS INDIVIDUAL COMPANIES INDIVIDUALS INFORMATION ASYMMETRY INSIDER DEALING INSOLVENCY INSOLVENCY REFORM INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSTITUTIONAL SHAREHOLDER INSTRUMENT INSURANCE INSURERS INTERNATIONAL FINANCE INVESTEE COMPANIES INVESTMENT BANKING INVESTMENT BANKS INVESTMENT DECISION INVESTMENT DECISIONS INVESTOR PARTICIPATION ISSUANCE JURISDICTIONS LAWYER LAWYERS LEGAL FRAMEWORK LEGISLATION LENDING DECISIONS LIMITED LIMITED LIABILITY LIMITED LIABILITY PARTNERSHIP LIQUID MARKETS LISTED COMPANIES LOW-INCOME COUNTRIES MAJORITY VOTE MAJORITY VOTING MARKET RISK MATURITY MERGERS MINORITY INVESTORS MINORITY SHAREHOLDERS MOTIVATIONS NUMBER OF SHAREHOLDERS OUTSIDE INVESTORS OWNERSHIP STRUCTURE OWNERSHIP RIGHT PARTY PORTFOLIO PORTFOLIOS PROPRIETARY PUBLIC EQUITY PUBLIC INFORMATION QUALITY ASSURANCE MECHANISM RAPID GROWTH REGULATORY ENVIRONMENT REPRESENTATIVES RESERVE RETURN RISK EXPOSURES RISK FACTORS RISK MANAGEMENT RISK PROFILE SAVINGS SCANDAL SECURITIES SECURITIES REGULATORS SHARE OPTIONS SHARE PRICE SHARE VALUE SHAREHOLDER SHAREHOLDER ACTIVISTS SHAREHOLDER BASE SHAREHOLDER INTERESTS SHAREHOLDER MEETINGS SHAREHOLDER RIGHTS SHAREHOLDERS SHAREHOLDERS MEETING SHAREHOLDERS MEETINGS SMALLER COMPANIES SPONSORS STAKEHOLDERS STOCK OPTIONS SUBSIDIARY SUPPLIERS SYSTEMIC RISK TAX TAX LAW TRADING TRANSACTION TRANSITION ECONOMIES TRANSPARENCY TRUST FUND TURNOVER UNDERWRITERS UNION WITHDRAWAL |
| spellingShingle |
ACCESS TO INFORMATION ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ACCOUNTING STANDARDS ACQUISITIONS AGENCY PROBLEMS ARTICLES OF ASSOCIATION ASSET MANAGEMENT AUDIT COMMITTEE AUTHORITY BAD FAITH BANK HOLDING BANKS BOARD MEETINGS BOARD MEMBERS BOARD MEMBERSHIP BUSINESS JUDGMENT RULE BUSINESS UNIT BUSINESS UNITS CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CASH FLOW CASH FLOWS CD CEO CEOS CHAIRMAN AND CEO CHIEF EXECUTIVE CODE OF CONDUCT COLLECTIVE COLLECTIVE ACTION COMMERCIAL RELATIONSHIPS COMPANY COMPANY INFORMATION COMPANY LAW COMPENSATION POLICY COMPETITORS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONGLOMERATE CONSENSUS CONTROLLING SHAREHOLDERS CORPORATE EXECUTIVES CORPORATE GOVERNANCE CODES CORPORATE GOVERNANCE REFORM CORPORATE GOVERNANCE REFORMS CORPORATE GOVERNANCE REGIME CORPORATE GOVERNANCE REGIMES CORPORATE GOVERNANCE SYSTEM CORPORATE OFFICERS CORPORATE PERFORMANCE CORPORATE SCANDALS CORPORATION CORPORATIONS COUNTRY TO COUNTRY CREDIT RATING CREDIT RATING AGENCIES CREDIT RATINGS DEBT DEBT ISSUES DECISION-MAKING DEPOSIT DERIVATIVE DERIVATIVES DEVELOPING MARKETS DIRECTOR LIABILITY DISCLOSURE DISCLOSURE REQUIREMENT DISCLOSURE REQUIREMENTS DISSEMINATION OF INFORMATION DIVIDENDS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC REFORM ECONOMIC STRESS EMERGING MARKET EMERGING MARKETS EMPLOYMENT ENABLING ENVIRONMENT ENTREPRENEURSHIP EQUITY HOLDERS EQUITY MARKETS ESCROW EXCHANGE COMMISSION EXPANSION EXPOSURE FAIR PRICE FAIR VALUE FIDUCIARY OBLIGATIONS FINANCE CORPORATION FINANCIAL ADVISER FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL HEALTH FINANCIAL INCENTIVES FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL RESULTS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEM FIRM SIZE FIRMS FOREIGN PORTFOLIO FOREIGN PORTFOLIO INVESTORS FRAUD GENERAL PARTNERSHIP GLOBAL CORPORATE GOVERNANCE GLOBAL INVESTOR GLOBAL INVESTORS GOVERNANCE ARRANGEMENTS GOVERNANCE GUIDELINES GOVERNANCE ISSUES GOVERNANCE MECHANISMS GOVERNANCE PRACTICES GUARANTOR HOLDING COMPANY HOLDINGS HUMAN RESOURCES INCOME INCOME TAXES INDEPENDENT BOARDS INDEPENDENT DIRECTOR INDEPENDENT DIRECTORS INDIVIDUAL COMPANIES INDIVIDUALS INFORMATION ASYMMETRY INSIDER DEALING INSOLVENCY INSOLVENCY REFORM INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSTITUTIONAL SHAREHOLDER INSTRUMENT INSURANCE INSURERS INTERNATIONAL FINANCE INVESTEE COMPANIES INVESTMENT BANKING INVESTMENT BANKS INVESTMENT DECISION INVESTMENT DECISIONS INVESTOR PARTICIPATION ISSUANCE JURISDICTIONS LAWYER LAWYERS LEGAL FRAMEWORK LEGISLATION LENDING DECISIONS LIMITED LIMITED LIABILITY LIMITED LIABILITY PARTNERSHIP LIQUID MARKETS LISTED COMPANIES LOW-INCOME COUNTRIES MAJORITY VOTE MAJORITY VOTING MARKET RISK MATURITY MERGERS MINORITY INVESTORS MINORITY SHAREHOLDERS MOTIVATIONS NUMBER OF SHAREHOLDERS OUTSIDE INVESTORS OWNERSHIP STRUCTURE OWNERSHIP RIGHT PARTY PORTFOLIO PORTFOLIOS PROPRIETARY PUBLIC EQUITY PUBLIC INFORMATION QUALITY ASSURANCE MECHANISM RAPID GROWTH REGULATORY ENVIRONMENT REPRESENTATIVES RESERVE RETURN RISK EXPOSURES RISK FACTORS RISK MANAGEMENT RISK PROFILE SAVINGS SCANDAL SECURITIES SECURITIES REGULATORS SHARE OPTIONS SHARE PRICE SHARE VALUE SHAREHOLDER SHAREHOLDER ACTIVISTS SHAREHOLDER BASE SHAREHOLDER INTERESTS SHAREHOLDER MEETINGS SHAREHOLDER RIGHTS SHAREHOLDERS SHAREHOLDERS MEETING SHAREHOLDERS MEETINGS SMALLER COMPANIES SPONSORS STAKEHOLDERS STOCK OPTIONS SUBSIDIARY SUPPLIERS SYSTEMIC RISK TAX TAX LAW TRADING TRANSACTION TRANSITION ECONOMIES TRANSPARENCY TRUST FUND TURNOVER UNDERWRITERS UNION WITHDRAWAL Wong, Simon C.Y. Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One |
| relation |
Private Sector Opinion; No. 14 |
| description |
This private sector opinion seeks to
demonstrate that while conventional governance mechanisms
can be highly effective in many situations, they are not
appropriate remedies in all contexts. In some cases, the
prescribed medicine actually exacerbated the governance
ailment that it was designed to cure. To illustrate, the
rapid growth of executive compensation persisted and in some
markets, accelerated after the introduction of individual
executive pay disclosure. In the financial sector, the shift
toward a board dominated by independent directors perceived
by many to be key for effective monitoring of management
ultimately proved to be its Achilles' heel as weak
industry knowledge meant that non-executive directors were
unable to pick up on warning signs of imprudent risk taking
by management. This section will examine how the core set of
corporate governance instruments comprising transparency,
independent monitoring, economic incentives, shareholder
rights, and financial liability has been applied to
different issues and contexts. It will discuss the extent to
which these mechanisms have been effective and analyze the
limits of their application by surveying cases where they
have failed to work as intended. In addition, it will set
forth proposals to improve the use of specific tools and
suggest how certain governance issues should be addressed. |
| format |
Publications & Research :: Brief |
| author |
Wong, Simon C.Y. |
| author_facet |
Wong, Simon C.Y. |
| author_sort |
Wong, Simon C.Y. |
| title |
Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One |
| title_short |
Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One |
| title_full |
Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One |
| title_fullStr |
Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One |
| title_full_unstemmed |
Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One |
| title_sort |
uses and limits of conventional corporate governance instruments : analysis and guidance for reform - part one |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2009/06/11503811/uses-limits-conventional-corporate-governance-instruments-analysis-guidance-reform-part-one http://hdl.handle.net/10986/11114 |
| _version_ |
1764415577507495936 |
| spelling |
okr-10986-111142021-04-23T14:02:54Z Uses and Limits of Conventional Corporate Governance Instruments : Analysis and Guidance for Reform - Part One Wong, Simon C.Y. ACCESS TO INFORMATION ACCOUNTABILITY ACCOUNTING ACCOUNTING RULES ACCOUNTING STANDARDS ACQUISITIONS AGENCY PROBLEMS ARTICLES OF ASSOCIATION ASSET MANAGEMENT AUDIT COMMITTEE AUTHORITY BAD FAITH BANK HOLDING BANKS BOARD MEETINGS BOARD MEMBERS BOARD MEMBERSHIP BUSINESS JUDGMENT RULE BUSINESS UNIT BUSINESS UNITS CAPITAL MARKET CAPITAL MARKETS CAPITAL REQUIREMENTS CASH FLOW CASH FLOWS CD CEO CEOS CHAIRMAN AND CEO CHIEF EXECUTIVE CODE OF CONDUCT COLLECTIVE COLLECTIVE ACTION COMMERCIAL RELATIONSHIPS COMPANY COMPANY INFORMATION COMPANY LAW COMPENSATION POLICY COMPETITORS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONGLOMERATE CONSENSUS CONTROLLING SHAREHOLDERS CORPORATE EXECUTIVES CORPORATE GOVERNANCE CODES CORPORATE GOVERNANCE REFORM CORPORATE GOVERNANCE REFORMS CORPORATE GOVERNANCE REGIME CORPORATE GOVERNANCE REGIMES CORPORATE GOVERNANCE SYSTEM CORPORATE OFFICERS CORPORATE PERFORMANCE CORPORATE SCANDALS CORPORATION CORPORATIONS COUNTRY TO COUNTRY CREDIT RATING CREDIT RATING AGENCIES CREDIT RATINGS DEBT DEBT ISSUES DECISION-MAKING DEPOSIT DERIVATIVE DERIVATIVES DEVELOPING MARKETS DIRECTOR LIABILITY DISCLOSURE DISCLOSURE REQUIREMENT DISCLOSURE REQUIREMENTS DISSEMINATION OF INFORMATION DIVIDENDS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC REFORM ECONOMIC STRESS EMERGING MARKET EMERGING MARKETS EMPLOYMENT ENABLING ENVIRONMENT ENTREPRENEURSHIP EQUITY HOLDERS EQUITY MARKETS ESCROW EXCHANGE COMMISSION EXPANSION EXPOSURE FAIR PRICE FAIR VALUE FIDUCIARY OBLIGATIONS FINANCE CORPORATION FINANCIAL ADVISER FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL HEALTH FINANCIAL INCENTIVES FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL RESULTS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SYSTEM FIRM SIZE FIRMS FOREIGN PORTFOLIO FOREIGN PORTFOLIO INVESTORS FRAUD GENERAL PARTNERSHIP GLOBAL CORPORATE GOVERNANCE GLOBAL INVESTOR GLOBAL INVESTORS GOVERNANCE ARRANGEMENTS GOVERNANCE GUIDELINES GOVERNANCE ISSUES GOVERNANCE MECHANISMS GOVERNANCE PRACTICES GUARANTOR HOLDING COMPANY HOLDINGS HUMAN RESOURCES INCOME INCOME TAXES INDEPENDENT BOARDS INDEPENDENT DIRECTOR INDEPENDENT DIRECTORS INDIVIDUAL COMPANIES INDIVIDUALS INFORMATION ASYMMETRY INSIDER DEALING INSOLVENCY INSOLVENCY REFORM INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSTITUTIONAL SHAREHOLDER INSTRUMENT INSURANCE INSURERS INTERNATIONAL FINANCE INVESTEE COMPANIES INVESTMENT BANKING INVESTMENT BANKS INVESTMENT DECISION INVESTMENT DECISIONS INVESTOR PARTICIPATION ISSUANCE JURISDICTIONS LAWYER LAWYERS LEGAL FRAMEWORK LEGISLATION LENDING DECISIONS LIMITED LIMITED LIABILITY LIMITED LIABILITY PARTNERSHIP LIQUID MARKETS LISTED COMPANIES LOW-INCOME COUNTRIES MAJORITY VOTE MAJORITY VOTING MARKET RISK MATURITY MERGERS MINORITY INVESTORS MINORITY SHAREHOLDERS MOTIVATIONS NUMBER OF SHAREHOLDERS OUTSIDE INVESTORS OWNERSHIP STRUCTURE OWNERSHIP RIGHT PARTY PORTFOLIO PORTFOLIOS PROPRIETARY PUBLIC EQUITY PUBLIC INFORMATION QUALITY ASSURANCE MECHANISM RAPID GROWTH REGULATORY ENVIRONMENT REPRESENTATIVES RESERVE RETURN RISK EXPOSURES RISK FACTORS RISK MANAGEMENT RISK PROFILE SAVINGS SCANDAL SECURITIES SECURITIES REGULATORS SHARE OPTIONS SHARE PRICE SHARE VALUE SHAREHOLDER SHAREHOLDER ACTIVISTS SHAREHOLDER BASE SHAREHOLDER INTERESTS SHAREHOLDER MEETINGS SHAREHOLDER RIGHTS SHAREHOLDERS SHAREHOLDERS MEETING SHAREHOLDERS MEETINGS SMALLER COMPANIES SPONSORS STAKEHOLDERS STOCK OPTIONS SUBSIDIARY SUPPLIERS SYSTEMIC RISK TAX TAX LAW TRADING TRANSACTION TRANSITION ECONOMIES TRANSPARENCY TRUST FUND TURNOVER UNDERWRITERS UNION WITHDRAWAL This private sector opinion seeks to demonstrate that while conventional governance mechanisms can be highly effective in many situations, they are not appropriate remedies in all contexts. In some cases, the prescribed medicine actually exacerbated the governance ailment that it was designed to cure. To illustrate, the rapid growth of executive compensation persisted and in some markets, accelerated after the introduction of individual executive pay disclosure. In the financial sector, the shift toward a board dominated by independent directors perceived by many to be key for effective monitoring of management ultimately proved to be its Achilles' heel as weak industry knowledge meant that non-executive directors were unable to pick up on warning signs of imprudent risk taking by management. This section will examine how the core set of corporate governance instruments comprising transparency, independent monitoring, economic incentives, shareholder rights, and financial liability has been applied to different issues and contexts. It will discuss the extent to which these mechanisms have been effective and analyze the limits of their application by surveying cases where they have failed to work as intended. In addition, it will set forth proposals to improve the use of specific tools and suggest how certain governance issues should be addressed. 2012-08-13T14:11:15Z 2012-08-13T14:11:15Z 2009-06 http://documents.worldbank.org/curated/en/2009/06/11503811/uses-limits-conventional-corporate-governance-instruments-analysis-guidance-reform-part-one http://hdl.handle.net/10986/11114 English Private Sector Opinion; No. 14 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research |