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The New Corporate Governance / Oliver D. Hart, Luigi Zingales.
- Format:
- Book
- Author/Creator:
- Hart, Oliver D.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w29975.
- NBER working paper series no. w29975
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2022.
- Summary:
- In the last few years, there has been a dramatic increase in shareholder engagement on environmental and social issues. In some cases shareholders are pushing companies to take actions that may reduce market value. It is hard to understand this behavior using the dominant corporate governance paradigm based on shareholder value maximization. We explain how jurisprudence has sustained this criterion in spite of its economic weaknesses. To overcome these weaknesses we propose the criterion of shareholder welfare maximization and argue that it can better explain observed behavior. Finally, we outline how shareholder welfare maximization can be implemented in practice.
- Notes:
- Print version record
- April 2022.
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