1、中文 1567 字 Corporate governance and board effectiveness（节选） Author： Kose John, Lemma W. Senbet Nationality： The U.S. Derivation: Journal of Banking and Finance 22(1998)371-403 (P374-376) Agency problems and corporate governance We view corporate governance in the context of control mechanisms designe
2、d for efficient operation of a corporation on behalf of its stakeholders. The control mechanisms themselves are necessitated by separation of ownership and control that is endemic to a market economy. Thus, corporate governance is a means by which various stakeholders exert control over a corporatio
3、n by exercising certain rights as established in the existing legal and regulatory frameworks as well as corporate bylaws. To appreciate the role of corporate governance, let us begin by thinking about an idealized market system which supports the familiar framework of the Fisherian Separation Princ
4、iple. Consider an economy with two classes of agents-consumers and producers.On the consumption side, consumer-investors make their decisions to maximize their utility through an appropriate allocation of their consumption over time and across commodities. On the production or real sector side, firm
5、s make investment decisions so as to tailor to individual consumption preferences. If this economy is devoid of capital markets with lending and borrowing opportunities, managers (separate from owners) have to infer the details of diverse consumption preferences of individual investors, and hence it
6、 is impossible to achieve unanimously agreed upon decision criteria regarding investment and production. In the presence of well-functioning capital markets, on the other hand, managers can be delegated to make investment and production decisions so as to maximize the wealth of firm owners(or firm-v
7、alue).Capital market prices become sufficient signals for production decisions, and consumption and production decisions are completely separable. The Fisherian Separation Principle is a basis for a market economy in which there is separation of ownership and control. It can also be shown that, unde
8、r these idealized conditions: wealth (value) maximization is equivalent to social welfare maximization. Thus, the key to a well-functioning economy is the existence of well-functioning markets which play a vital role in allocating resources efficiently, whereby resources are channeled to most produc
9、tive uses. Unfortunately, the real economy is not as idealized as the Fisherian form. It is characterized by imperfect information, agency conflicts, and a host of market imperfections, such as transactions costs, taxes, and regulatory and institutional impediments to the arbitrage process in capita
10、l markets. We take an agency perspective in discussing the issues and principles underlying corporate governance and board effectiveness. Indeed, the firm can be viewed as a nexus or network of contracts (Jensen and Meckling, 1976), implicit and explicit, among various parties or stakeholders, such
11、as shareholders (equityholders), bondholders, employees, and the society at large. This is now a widely held view in finance. The pay-off structure of the claims of different classes of stakeholders is different. The degrees of alignment of interests with those of the agents in the firm who control
12、the major decisions in the firm are also different. This gives rise to potential conflicts among the stakeholders, and these incentive conflicts have now come to be known as agency (principal-agent) problems. Left alone, each class of stakeholders pursues its own interest which may be at the expense
13、 of other stakeholders. We can classify agency problems on the basis of conflicts among particular parties to the firm, such as conflicts between stockholders (principals)and management(agent)(managerial agency or managerialism),between stockholders (agents)and bondholders(debt agency),between the p
14、rivate sector(agent)and the public sector(social agency),and even between the agents of the public sector(e.g., regulators)and the rest of the society or taxpayers(political agency). See Berea et al.(1985)for more detailed classification and discussion of private agency problems, and John and Senbet
15、 (1996)for social agency problems.Agency problems detract from efficient operation of an enterprise. Departures from efficient investment strategies are detrimental to economic growth and development. Thus, the economic and financial environment, that fosters efficient corporate governance and effic
16、ient contracting among parties with diverse interests, promotes efficient allocation of resources, and hence ultimately economic development. Our focus is on private agency perspective of corporate governance. It may be useful to outline two classes of agency problems before we go into a fullfledged
17、 discussion of corporate governance. First, managerialism refers to self-serving behavior by managers. Ownership of the modern corporation, particularly in the US, is widely diffused, with most large corporations being owned by a large number of shareholders. But, under separation of ownership and c
18、ontrol, the actual operations of the firm are conducted by managers who typically lack major stock ownership positions. The potential conflict arising between managers and owners manifests itself in several dimensions. The management-stockholder conflict leads to managerial propensity for:(a) expand
19、ing a span of control in the form of empire building at the expense of the capital contributors or owners, and (b) for unduly conservative investments in the form of seeking safe but inferior projects to maintain the safety of wage compensation and their own tenure. Second, debt agency arises, since the debt contract may give managers, working on behalf of owners (equityholders), to make investment and financing decisions sub-optimally by departing from the principle of value maximization.
