Bob Tricker (Oxford University Press, 2009, 2012, 2015)
Also in Vietnamese
Throughout the 20th century, the focus had been on management. But where was the board on the management organization chart?
'Corporate Governance' is based on material that I have developed over the years for executive MBA courses at the University of Hong Kong, MBA programmes at the Australian Graduate School of Management, the University of Melbourne, Hong Kong Baptist University, a distance learning course for Hong Kong Open University, and directors’ courses at the Institutes of Directors in London and Sydney, as well as corporate governance courses for Russian university teachers sponsored by the Canadian Government at the Schulich School of Business in Toronto.
My interest in boards and their behaviour was really kindled, however, in the 1970s, when I was head of the Oxford Centre for Management Studies, subsequently to become Templeton College, and then part of the Saïd Business School, Oxford. The Management Centre was incorporated as a company limited by guarantee and its board of directors, called a council, comprised heads of Oxford colleges and leaders of major British companies. The council outnumbered the academic staff. Its divisive cliques, political power plays, and unpredictable interpersonal relations astounded me. This was not the behaviour of the classical organization theories, analytical decision making, and basic management concepts that we were teaching in the Management Centre.
It occurred to me that governance was different from management. Throughout the 20th century, the focus had been on management. But where was the board on the management organization chart? Clearly, the governance of corporate entities and the processes of their governing bodies was a subject that deserved study. A subsequent five-year Research Fellowship at Nuffield College, Oxford, led to a paper Perspectives on Corporate Governance: Intellectual Influences in the Exercise of Corporate Governance that was published in a 1983 collection of essays edited by Oxford’s Michael Earl.
Over 30 years later, that paper’s first sentence, which linked John Maynard Keynes, John Stuart Mill, and Karl Marx, seems unbearably pretentious. But the paper did manage to introduce the subject and the phrase ‘corporate governance’. It identified some issues that remain pertinent to this day: the structure of boards; the role of non-executive directors and the concept of independence; the governance of complex groups; the board’s role in strategy formulation, policy-making, supervising management, and accountability; corporate regulation; and corporate social responsibility. In those days, board-level participation by employees was also an important topic.
I developed the ideas in the Earl paper in the book Corporate Governance, published in 1984. I remember agonizing over the term ‘corporate governance’ in the title. Although ‘governance’ was an ancient concept, ‘corporate governance’ was not a phrase then in use. Indeed, I had named the trust that funded my research at Nuffield College the Corporate Policy Group, not the Corporate Governance Group. Subsequently, of course, the subject has moved centre stage. Indeed, it may well be that the social historian will see the 21st century as the era of corporate governance, just as the 20th century had been that of management.
The story of the governance of the Oxford Management Centre and the attitude of Oxford University to management education is described in a new book Oxford Circus.
This book will enable readers to:
● appreciate the nature, functions, and realities of boards of directors and other governing bodies;
● analyse board structures, systems, and procedures, including board committees, chairmen, and chief executives, board remuneration, board leadership, and board effectiveness;
● understand major aspects of corporate governance, including:
– corporate governance principles and codes of practice;
– the board’s performance roles: strategy formulation and policymaking;
– the board’s conformance roles: executive supervision and accountability;
– the board’s responsibility for handling corporate risk;
– assessment of board and director performance;
– corporate governance rating systems;
● understand various theories of corporate governance;
● appreciate corporate governance processes around the world, including:
– adopting an international and comparative perspective on the subject;
– contrasting corporate governance regimes around the world;
– understanding the cultural aspects of different approaches to governance;
● recognize the issues that are influencing corporate governance and board thinking, including strategic risk management, corporate social responsibility, sustainability, and business ethics.
This edition has had to be extensively rewritten to reflect changes since the second edition was published in 2012. Corporate governance around the world continues to develop and grow in importance. Principles, policies, and practices have all been extended. New theoretical insights have occurred. In many jurisdictions, the global financial crisis brought changes in company law and new corporate regulation, while some stock exchanges have extended their corporate governance reporting requirements. Boards’ responsibility for the governance of risk has been emphasized. Levels of director remuneration have caused public dissatisfaction and various schemes to increase transparency and obtain approval have emerged. Creating the company’s ethical culture, determining its corporate social responsibility, and integrating economic, social, and environmental performance are increasingly recognized as part of boards’ corporate governance responsibilities.
The previous editions were derived from material produced over the years for courses involving post-experience Master’s degree students and corporate governance practitioners (company directors, company secretaries, auditors, corporate lawyers, and so on). Experience shows that the book has been used in various graduate, undergraduate, and professional courses and as a set text for professional examinations. So, although the original three sections – principles, policies, and practices – remain, the sequence of some chapters has been changed.
The book takes a comprehensive and international perspective on a subject that is of ever increasing significance – the way power is exercised over corporate entities. Public companies, family firms, public bodies, and many other types of corporate institutions are covered. The financial crisis, which saw some major institutions in the US, the UK, and Europe threatened with collapse, government bail-out, and nationalization, focused attention on the culture of these organizations and their directors’ attitude to risk. Significant developments have occurred in the past two or three years in some of these cases. Institutional investors and an investigative media increasingly challenge board-level decisions. Investor relation activities have increased in response. Further recent developments, such as growing concerns about business ethics and the role of business leaders, aggressive tax avoidance, alleged excessive executive remuneration, whistle-blowing, relations with auditors, corporate social responsibility, attitudes to risk, women on boards including ideas around the world on quotas, shareholder involvement, and the governance of corporate entities that do not have shareholders, highlighted the need for new material.
For more insights go to Reviews of Corporate Governance