Securities Law Commons^™

Shifting Influences On Corporate Governance: Capital Market Completeness And Policy Channeling, Ronald J. Gilson, Curtis J. Milhaupt

Faculty Scholarship

Corporate governance scholarship is typically portrayed as driven by single factor models, for example, shareholder value maximization, director primacy or team production. These governance models are Copernican; one factor is or should be the center of the corporate governance solar system. In this essay, we argue that, as with binary stars, the shape of the governance system is at any time the result of the interaction of two central influences, which we refer to as capital market completeness and policy channeling. In contrast to single factor models, which reflect a stable normative statement of what should drive corporate governance, in …