Corporate Governance: Principles, Policies and Practices, 2nd Edition

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The Role of the Media in Ensuring Corporate Governance

CHAPTER OUTLINE

• Introduction
• Importance of Media
• Corporate Governance and the Press
• Adverse Effects of Advertising
• Ethics in Advertising

Introduction

The media can play a major role in corporate governance by affecting reputation in at least three ways. First, media attention can drive politicians to introduce corporate law reforms or enforce corporate laws in the belief that inaction would hurt their future political careers or shame them in the eyes of public opinion, both at home and abroad. Second, media attention could affect reputation through the standard channel that most economic models emphasise. Managers’ wages in future depend on shareholders’ and future employers’ beliefs ...