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From Value Protection To Value Creation: Rethinking Corporate Governance Standards For Firm Innovation, Roger M. Barker, Iris H-Y Chiu

Fordham Journal of Corporate & Financial Law

A company’s pro-innovation needs are often met by the exploitation of its resources, widely defined. The resource-based theory of the firm provides immense empirical insights into how a firm’s corporate governance factors can contribute to promoting innovation. However, these implications may conflict with the prevailing standards of corporate governance imposed on many securities markets for listed companies, which have developed based on theoretical models supporting a shareholder-centered and agency-based theory of the firm. Although prevailing corporate governance standards can to an extent support firm innovation, tensions are created in some circumstances where companies pit their corporate governance compliance against resource-based …