"Rules"I f Tversus“Principles”The Search ForTransparency InCorporate Governance

Dr. Rajeeva Sinha

doi:10.65301/dias.2004.1.1.182

Articles 1st Edition of DTR Apr 2004

DOI 10.65301/dias.2004.1.1.182

"Rules"I f Tversus“Principles”The Search ForTransparency InCorporate Governance

Authors

DR

Dr. Rajeeva Sinha

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141 Downloads

Published 2004-04-30

Pages 15-21

Abstract

n the aftermath of the recent If US corporate scandals a lively I'l debate has emerged regarding T the relative merits of the j "principles" and the "rules" i. based approaches to corporate i governance. I examine the ! relevance of this debate for the i . effectiveness of a corporate iff governance structure. JEL ? Classification: Corporate Governance-Finance-an dn| Governance: - General (G300)

References

1. Amihud, Y. & Lev, B. [1981J, "Risk reduction as a managerial motive for conglomerate mergers", Bell Journal o f Economics, 12:605-617.
' X ’ $ <
2. Amir, E.&Lev, B. (1996), "Value of non financial Information: The wireless communication industry", Journal of Accounting and Economics, 22:3-30.
3. Cadbury, A. (1992), Report o f the Committee on the Financial Aspects of Corporate Governance, London: Gee and Co. Ltd.
4. Claessons S., Djankov, S. Lang, LLP. (2000), "The separation o f ownership and control in east asiati corporations", Journal of Financial Economics, 58,81-112.
5. Beach, L.R., Mitchell, T.R. Paluchowski,T.F. and van Zee, E.H. (1992}, "Image Theory: decision framing and deliberation", in: Frank Heller (Ed.) Decision-making and Leadership, Cambridge University Press.
6. Daniels, R.J. and Iacobucci, EM. (2000), ’Some of the causes and consequences of corporate ownership concert tration in Canada in
Morck,R. (Ed) Concei mated corporate ownership, University of Chicago Press
I. DechowP.M., Sloan, R.G.& Sweeny, A.P(1995), "Detecting Earnings Management". The Accounting Review, 70,193-225
8. Denis, D.J, Denis, D.K. and Sarin, A.(l 997), ’Ownership structure and top executive turnover’, Journal o f Financial Economics, 45.
193-221.
9. Faccia, M. & Larry, L.H. P. (2002), "The ultimate ownership oj Western European Corporations", Journal o f Financial Economics, 65.365-
| 395.
10. Fama, E.F., and Jensen, M. C. (1983), 'Separation of ownership from control', Journal of Law and Economics, 26.375-393.
II. Feldman, M.S. & March. J. G. (1981), "Information in organisation as signal and symbol", Adrn inistrative Science Quarterly. 26:171-186.
12. Hampel, R., (1998), Committee on Corporate Governance, Final Report, London: Gee Publishing Ltd.
13.. Hart, O., (1995), 'Corporate governance: Some theory and implications'. Economic Journal. 105,678-689.
14. Healy ,P.M., and Palepu, K.G. (1995), The challenges o f investor communication. Journal of Financial Economics, 38,111-140.
15. Mealy, P M ., a n d P a le p u , K.G. (2001), Information asymmetry, corporate disclosure, and the capital markets: A review o f the empirical literature. Journal o f Accounting andEconomics.31,1405-440.
16. Holderness, C.G. and Sheehan, D.P. (2000), 'Constraints on large-block shareholders', in Morck, R. (Ed) Concentrated corporate ' ownership, University o f Chicago Press
17. Hutton, A., Miller, G., Skinner, D. (2000)1, "Effective Voluntary Disclosure". Unpublished Working Paper. Harvard Business School.
18. Jensen M.C. and Med ling, W.H. (1976), 'Theory of the firm: managerial behaviour, agency costs and ownership structure'. Journal o f
Financial Economic* 3,305-360.
19. Jensen, M.C. (1993), 'The modern industrial revolution, exit and failure of internal control systems'. Journal of Finance. 48.831-880.
20. Kreps,D. (1988), 'Corporate culture and economic theory', in Alt.).Fund Sltepsle. K.A. (Ed.). Perspective on Positive Political Economy.
C am bridge: Cambridge University Press.
21. Milgrom, P.& Roberts, J.(1988). "An economic approach to influence activities in organisations". American Journal o f Sociology. 94
| (Supplement) 154-179
22. Morck, R. Strangeland, D.A. and Yeung, B. (2000), Inherited Wealth. Corporate Control and Economic Growth: The Canadian Disease?'
National Bureau o f Economic Research Working Paper Series, Working Paper No. 6814 , Cambridge, Massachusetts
23. Rosenstein, S. andV/yatt,J. C. (1997), 'Inside directors, board effectiveness, and shareholder wealth, 'Journal o f Financial Economics. 44. 229-250.
24. Shleifer,A. andVishny, R.W. 1997. A survey ofcorporate governance. Journal o f Finance, 52(2). 737-782
25. Simon, Tl.A. (1976), 'From substantive to procedural rationality’, in Latsis. S.J. (Ed.) Method and Appraisal in Economics, Cambridge: Cambridge Universily Press.
26. SonnenfeldJ.A. (2002), What makes great boards great', Harvard Business Review, 106-113
27. Sliglitz, J.E. & EdlinA.S. (1992), "Discouraging rivals: Managerial rent seeking and economic inefficiencies". NBER Working Paper No. 4145
28. Wiggins, S.N., (1990), "The comparative advantage o f long term contracts and firms', Law, Economics and Organization, 6,155-170.
29. Woidtke, T., (2001),'. gents watching agents?: evidence from pension fund ownership and firm value', Journal o f Financial Economics.
63,99-131

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Dr. Rajeeva Sinha . (2004). "Rules"I f Tversus“Principles”The Search ForTransparency InCorporate Governance. DIAS Technology Review, 1(1), 15-21.

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[1] 1. Amihud, Y. & Lev, B. [1981J, "Risk reduction as a managerial motive for conglomerate mergers", Bell Journal o f Economics, 12:605-617.

[2] ' X ’ $ <

[3] 2. Amir, E.&Lev, B. (1996), "Value of non financial Information: The wireless communication industry", Journal of Accounting and Economics, 22:3-30.

[4] 3. Cadbury, A. (1992), Report o f the Committee on the Financial Aspects of Corporate Governance, London: Gee and Co. Ltd.

[5] 4. Claessons S., Djankov, S. Lang, LLP. (2000), "The separation o f ownership and control in east asiati corporations", Journal of Financial Economics, 58,81-112.

[6] 5. Beach, L.R., Mitchell, T.R. Paluchowski,T.F. and van Zee, E.H. (1992}, "Image Theory: decision framing and deliberation", in: Frank Heller (Ed.) Decision-making and Leadership, Cambridge University Press.

[7] 6. Daniels, R.J. and Iacobucci, EM. (2000), ’Some of the causes and consequences of corporate ownership concert tration in Canada in

[8] Morck,R. (Ed) Concei mated corporate ownership, University of Chicago Press

[9] I. DechowP.M., Sloan, R.G.& Sweeny, A.P(1995), "Detecting Earnings Management". The Accounting Review, 70,193-225

[10] 8. Denis, D.J, Denis, D.K. and Sarin, A.(l 997), ’Ownership structure and top executive turnover’, Journal o f Financial Economics, 45.

[11] 193-221.

[12] 9. Faccia, M. & Larry, L.H. P. (2002), "The ultimate ownership oj Western European Corporations", Journal o f Financial Economics, 65.365-

[13] | 395.

[14] 10. Fama, E.F., and Jensen, M. C. (1983), 'Separation of ownership from control', Journal of Law and Economics, 26.375-393.

[15] II. Feldman, M.S. & March. J. G. (1981), "Information in organisation as signal and symbol", Adrn inistrative Science Quarterly. 26:171-186.

[16] 12. Hampel, R., (1998), Committee on Corporate Governance, Final Report, London: Gee Publishing Ltd.

[17] 13.. Hart, O., (1995), 'Corporate governance: Some theory and implications'. Economic Journal. 105,678-689.

[18] 14. Healy ,P.M., and Palepu, K.G. (1995), The challenges o f investor communication. Journal of Financial Economics, 38,111-140.

[19] 15. Mealy, P M ., a n d P a le p u , K.G. (2001), Information asymmetry, corporate disclosure, and the capital markets: A review o f the empirical literature. Journal o f Accounting andEconomics.31,1405-440.

[20] 16. Holderness, C.G. and Sheehan, D.P. (2000), 'Constraints on large-block shareholders', in Morck, R. (Ed) Concentrated corporate ' ownership, University o f Chicago Press

[21] 17. Hutton, A., Miller, G., Skinner, D. (2000)1, "Effective Voluntary Disclosure". Unpublished Working Paper. Harvard Business School.

[22] 18. Jensen M.C. and Med ling, W.H. (1976), 'Theory of the firm: managerial behaviour, agency costs and ownership structure'. Journal o f

[23] Financial Economic* 3,305-360.

[24] 19. Jensen, M.C. (1993), 'The modern industrial revolution, exit and failure of internal control systems'. Journal of Finance. 48.831-880.

[25] 20. Kreps,D. (1988), 'Corporate culture and economic theory', in Alt.).Fund Sltepsle. K.A. (Ed.). Perspective on Positive Political Economy.

[26] C am bridge: Cambridge University Press.

[27] 21. Milgrom, P.& Roberts, J.(1988). "An economic approach to influence activities in organisations". American Journal o f Sociology. 94

[28] | (Supplement) 154-179

[29] 22. Morck, R. Strangeland, D.A. and Yeung, B. (2000), Inherited Wealth. Corporate Control and Economic Growth: The Canadian Disease?'

[30] National Bureau o f Economic Research Working Paper Series, Working Paper No. 6814 , Cambridge, Massachusetts

[31] 23. Rosenstein, S. andV/yatt,J. C. (1997), 'Inside directors, board effectiveness, and shareholder wealth, 'Journal o f Financial Economics. 44. 229-250.

[32] 24. Shleifer,A. andVishny, R.W. 1997. A survey ofcorporate governance. Journal o f Finance, 52(2). 737-782

[33] 25. Simon, Tl.A. (1976), 'From substantive to procedural rationality’, in Latsis. S.J. (Ed.) Method and Appraisal in Economics, Cambridge: Cambridge Universily Press.

[34] 26. SonnenfeldJ.A. (2002), What makes great boards great', Harvard Business Review, 106-113

[35] 27. Sliglitz, J.E. & EdlinA.S. (1992), "Discouraging rivals: Managerial rent seeking and economic inefficiencies". NBER Working Paper No. 4145

[36] 28. Wiggins, S.N., (1990), "The comparative advantage o f long term contracts and firms', Law, Economics and Organization, 6,155-170.

[37] 29. Woidtke, T., (2001),'. gents watching agents?: evidence from pension fund ownership and firm value', Journal o f Financial Economics.

[38] 63,99-131