The Recurrent Crisis in Corporate Governance

by Paul MacAvoy, Ira Millstein

Overview

Named by The Economist as one of six “best books” in economics and business for 2003.
“With a penetrating analysis of the recent failures so glaringly revealed in the spate of corporate scandals, and broad new insights into what went wrong, the book charts a new course to avoid such failings in the future. Combining first-rate scholarship with originality, the book sets a new standard for all who are interested in corporate governance.” —John Snow,Former Chairman and COO, CSX Corporation and Former Co-Chair of the Conference Board Commission on Public Trust and Private Enterprise

Product Details

ISBN-13:	9780804750868
Publisher:	Stanford University Press
Publication date:	08/18/2004
Edition description:	1
Pages:	192
Product dimensions:	5.50(w) x 8.50(h) x 0.60(d)

About the Author

Paul W. MacAvoy is a Thomas F. and William J. Gilbane President Fellow in the Department of Economics at Brown University. Professor MacAvoy served on President Ford's Council of Economic Advisors and on the board of directors of several corporations including Lafarge, American Cyanamid, Alumax, Combustion Engineering and the Chase Manhattan Bank Corporation. He is the author of twenty books and numerous journal articles focusing on government regulation of the structure and conduct of the corporation. Ira M. Millstein, Senior Partner, Weil, Gotshal & Manges LLP, has taught corporate governance, antitrust, and government regulation at New York University, Harvard's Kennedy School of Government, and currently as a Visiting Professor at the Yale University School of Management. An Elected Fellow of the American Academy of Arts & Sciences, he has counseled over 50 public and philanthropic boards, including General Motors, CalPERS, Tyco, and The Nature Conservancy, and has published numerous articles on corporate governance.

Table of Contents

	List of Figures and Tables	xi
	List of Appendix Tables	xii
	List of Abbreviations	xiii
	Preface	xv
1	Introduction and Summary	1
2	The Current Crisis	7
3	The Emergence and Development of the Governance Problem	13
	Conglomeration as an example of managerial self-interest	15
	Other sources of accelerated change	23
	The emergence of the full role of the board of directors	31
	Has the emergence of "new" governance, in terms of board diligence and focus, become observable?	35
4	The Ambivalent Results of Extant Research on the Impact of Strong Governance on Corporate Performance	37
5	A New Approach for Determining the Effect of Strong Governance on Corporate Performance	49
	Metrics for board independence and professionalism	51
	Metrics for performance	53
	Methodology	59
	Estimation and analysis of the governance/corporate performance relationship	62
	The calculation of economic value added	64
	Superior performance after a change in governance	70
	Conclusion	71
6	"Where Was the Board?" Share Price Collapse and the Governance Crisis of 2000-2002	73
	The status quo in corporate governance in the 1990s	75
	Incremental change	76
	The collapse of Enron and the others	85
	The nine largest companies investigated for fraudulent financial reporting	93
	Where was the board of directors?	96
	A second look at management out of control	100
7	Proposals for Reform of Corporate Governance	107
	New expectations for improved performance in boards of directors	115
	Recommendations	127
Appendix A	Technical Implementation Issues in the Analysis of EVA for CalPERS-rated Companies	136
Appendix B	Database of EVA Estimates	143
	References	151
	Index	165

Editorial Reviews

Named by The Economist as one of six "best books" in economics and business for 2003.


"With a penetrating analysis of the recent failures so glaringly revealed in the spate of corporate scandals, and broad new insights into what went wrong, the book charts a new course to avoid such failings in the future. Combining first-rate scholarship with originality, the book sets a new standard for all who are interested in corporate governance." —John Snow,Former Chairman and COO, CSX Corporation and Former Co-Chair of the Conference Board Commission on Public Trust and Private Enterprise


20% discount when ordered using discount code F4MAC

From the Publisher