Bob Tricker (Oxford University Press, 2009, 2012, 2015, 2019)
Also in Vietnamese
Throughout the 20th century, the focus had been on management. But where was the board of directors on the management organization chart? The twenty-first century, however, has seen corporate governance come centre stage, with the spotlights on the way power is exercised over corporate entities around the world.
My interest in boards and their behaviour was kindled in the 1970s, when I was Director 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. Council members always outnumbered the academic staff. Council’s 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. The governance of corporate entities and the activities 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 independent directors; the governance of complex groups; the board’s role in strategy formulation, policy-making, management supervision, and accountability; corporate regulation; and corporate social responsibility.
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 word, ‘corporate governance’ was not a phrase then in use. Indeed, I had named the trust that funded my research at Nuffield 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.
This book is rooted in material I 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.
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;
– the 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 been extensively rewritten to reflect changes since the third edition was published in 2015. Corporate governance around the world continues to develop and grow in importance. Principles, policies, and practices have all evolved. New theoretical insights have occurred. In some jurisdictions, company law and corporate regulations have changed, corporate governance codes have been updated, while some stock exchanges have extended their corporate governance reporting requirements. Boards’ responsibility for the governance of risk, particularly cyber risk, has been further emphasized. Levels of director remuneration continue to cause public dissatisfaction and various schemes to increase transparency and obtain shareholders’ approval have emerged. Concerns about companies’ social responsibility (CSR) and sustainability have continues to grow, together with a focus on the board’s responsibility for setting the ethical culture of their company. New interest has been shown in companies’ role in society and the integration of 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 has shown that the book has been used in various graduate, undergraduate, and professional courses and as a set text for professional examinations.
The book takes an international perspective on a subject that is of ever increasing significance around the world – the way power is exercised over corporate entities. The governance of public companies, family firms, public bodies, and many other types of institution are covered. The financial crisis, which saw some major institutions in the US, the UK, and Europe threatened with collapse, government bail-out, or nationalization, focused attention on the culture of these organizations and their directors’ attitude to risk. Shareholder activity and an investigative media increasingly challenge board-level decisions. Investor relation activities, involving new forms of media communication, have continued increased in response.
The case studies, which are a central feature of the book, have been changed extensively. Some of the classical corporate governance cases, such as Enron, Robert Maxwell, and the Fukushima disaster in Japan, remain. But many other cases have been replaced. The new cases include governance issues in Alibaba and Huawei in China, Tata in India, Sports Direct, BHS and the NHS in the UK, and Amazon, Alphabet (Google) and Wells Fargo in the US.
For more insights go to Reviews of Corporate Governance