“Corporate governance research: Its current state and future directions” by Professor Marc van Essen
Professor Marc van Essen
Professor of Entrepreneurship and Innovation
University of St. Gallen
I emphasize that the central question in corporate governance raised in 1968, still remains the same: “How does it happen that millions of individuals are willing to turn over a significant fraction of their wealth to organizations run by managers who have so little interest in their welfare?” The dominant logic, based mostly on research guided by agency theory in the context of publicly held U.S. firms, shows very weak empirical support both in terms of statistical and economic significance. Corporate governance research is in desperate need of a revolution. First, we should start thinking in terms of ownership of firms and explore other types of firms besides publicly listed firms – for example, family firms or state‐owned firms. Second, we need better understanding of institutional voids ‐ a critical phenomenon capable of explaining relationships that agency logic alone does not capture. Finally, future studies should move beyond “disciplining managers” research areas towards examining goals of owners, managerial discretion, employee investments and minority and institutional investors. In other words, research in corporate governance should shift gears from wealth protection to wealth creation.