Corporate governance has traditionally been viewed as a way to reduce agency costs between shareholders and managers in the context of private ordering. Laws and regulations pertaining to corporate governance have, therefore, typically aimed to enhance long-term wealth for shareholders.
Governments have in recent years, however, discovered a new use for corporate governance: advancing the public interest. This has been done by promoting everything from environmental causes to gender diversity to humanitarian aid. In the United Kingdom, the government has been explicit in advocating this view of corporate governance. Prime Minister Theresa May has expressly noted that corporate governance should … Read more