Entrepreneurs and Democracy: A Political Theory of Corporate Governance

by Pierre-Yves Gomez , Harry Korine

• ISBN13: 9780521169608
• ISBN10: 0521169607
• Edition: Revised
• Format: Paperback
• Copyright: 2010-12-16
• Publisher: Cambridge University Press

Summary

What legitimizes power within a corporation? This question is of concern to the millions of citizens whose lives depend upon the fate of business corporations. The rules, institutions and practices of corporate governance define the limits of the power to direct, and determine under what conditions this power is acceptable. Effective corporate governance has long been defined in terms of economic performance. More recent studies have focused on philosophical, political and historical analyses. Entrepreneurs and Democracy unites these strands of inquiry - the legitimacy of power, the evolution of multiple forms of governance and the economics of performance - and proposes a framework for future study. It explores the opposing tensions of entrepreneurial force and social fragmentation that form the basis of legitimate corporate governance in modern societies. In doing so, it identifies a common logic that links both the democratization of corporate governance and the growth of economic performance.

Table of Contents

List of figures and tables	p. viii
Foreword	p. ix
Introduction	p. 1
Establishing the ideological foundations: the contribution of liberal political philosophy	p. 13
Introduction to Part I	p. 15
The invisible crown: political foundations of the legitimate entrepreneur	p. 19
Governance by entrepreneurial direction: the dilemma of liberty in the foundational texts of liberalism	p. 21
The role of the entrepreneur in the liberal logic	p. 25
The entrepreneur crowned: a modern Leviathan?	p. 36
Society fragmented and the role of democracy	p. 39
The freedom to become an entrepreneur	p. 40
The institution of democracy or how to regulate a fragmented society	p. 47
Conclusion to Part I	p. 54
Understanding how corporate governance evolves: the contribution of history	p. 59
Introduction to Part II	p. 61
Familial governance (c.1800-1920): economic enfranchisement and the founder as entrepreneur	p. 64
The entrepreneur - a child of modernity	p. 65
Discretionary power and its counterweight: the familial model of governance	p. 75
Familial governance: a politically fragile equilibrium	p. 92
Managerial governance (c. 1920-1970): separation of powers and management as entrepreneur	p. 99
The demise of the familial model of governance	p. 100
Power to the experts: managerial governance	p. 115
Limiting the powers of management: technocracy under social control	p. 124
Equilibrium and threats to managerial governance	p. 132
Post-managerial governance (from c.1970): ownership of the large corporation reaches unprecedented mass and fragments into multiple poles	p. 136
Managerial governance comes under attack	p. 137
From managerial governance to public governance: two new poles of entrepreneurial power	p. 155
Interpreting public governance: representation and debate signify a new step towards democratization	p. 173
Two forms of governance: intrinsic and extrinsic	p. 175
One model of post-managerial model governance: public governance	p. 200
Synthesis: public governance in the context of liberal society	p. 212
Conclusion to Part II	p. 215
Corporate governance and performance: the contribution of economics	p. 223
Introduction to Part III	p. 225
The Pure Economic Model of corporate governance: an analysis	p. 227
The paradox of Berle and Means	p. 230
Reaction to Berle and Means: a Pure Economic Model of corporate governance	p. 237
An economic model of corporate governance in the liberal spirit	p. 247
Critique of the Pure Economic Model of corporate governance	p. 251
Empirical failures	p. 252
Internal contradictions	p. 259
The unseen problem: today's fragmented ownership of property	p. 269
Economic performance, corporate governance, and the fragmentation of ownership	p. 274
Corporate governance as a guarantee	p. 276
The economic function of corporate governance as a system of guarantee	p. 291
An economic interpretation for models of governance	p. 301
Conclusion to Part III	p. 303
Epilogue	p. 307
Index	p. 324
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