Corporate Governance

Author:

Aguilera Ruth V.

Abstract

Corporate governance entails the design of a bundle of practices and processes to distribute the allocation of decision-making power among the different actors in the firm to promote value creation in the long term. It is at the heart of strategic thinking and implementation, because governance practices are designed to incentivize certain behavioral strategies, such as promoting sustainability, and to monitor that other courses of action are not taken, such as ethical lapses. This chapter first discusses what corporate governance is and why it is important for strategic management. Then the chapter reviews key areas that have received the most attention in the strategy literature, such as shareholder engagement and international corporate governance. The last and largest section of this chapter discusses three emerging corporate governance themes relevant to firm strategy in these changing global, digital, and pandemic times.

Publisher

Oxford University Press

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