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CORPORATE GOVERNANCE AND CONTROL

Chapter ICORPORATE GOVERNANCE AND CONTROLMARCO BECHT*ECARES, Universit Libre de Bruxelles and European CORPORATE GOVERNANCE Institute (ECGI)PATRICK BOLTON*Bendheim Center for Finance at Princeton University, NBER, CEPR and ECGIAILSA ROELL*Bendheim Center for Finance at Princeton University, CEPR and ECGIC ontentsAbstract 3 Keywords 31 Introduction 42 Historical origins: a brief sketch How representative is CORPORATE government? Whom should CORPORATE government represent? 73 Why CORPORATE GOVERNANCE is currently such a prominent issue The world-wide privatization wave Pension funds and active investors Mergers and takeovers Deregulation and capital market integration The 1998 Russia/East Asia/Brazil crisis Scandals and failures at major USA corporations 134 Conceptual framework Agency and contracting Ex-ante and ex-post efficiency Shareholder value Incomplete contracts and multiple constituencies Why do we need regulation?

7.3 Minority shareholder action 67 7.3 1 Proxy fights 67 7.3 2 Shareholder activism 68 7.3 3 Shareholder suits 69 7.4 Boards 71 7.4 1 Institutional differences 71 7.4 2 Board independence 72 7.4 3 Board composition 72 7.4 4 Working of boards 72 7.4 5 International evidence 73 7.5 Executive compensation and careers 73

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  Shareholders, Minority, Minority shareholder

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