Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences

14. Summary and Conclusions

In this book, we have taken a thorough and critical look at corporate governance from an organizational perspective. We started by reviewing the environment in which the organization competes to understand how legal, social, and market forces influence the control mechanisms it adopts to prevent or discourage self-interested behavior by management. Next, we introduced the board of directors and examined the structure, processes, and operations of the board. We emphasized that the qualifications and engagement of these individuals are likely the most important determinants of their ability to advise and monitor the organization.

We then explored the functional responsibilities of the board, including strategic oversight ...