Corporate governance theory

Author: Ning Xiangdong
Publisher:
Publish Date: 2006-12-22
Features: After the publication of this book, it has been highly appreciated by many readers and peers. In over a year, it was printed twice and quickly sold out. The book's editor told me that for a relatively serious academic work, this result is very rare today. Apart from feeling a bit proud of this achievement, I was more overwhelmed and conflicted. On one hand, the author hopes more people can read his book to increase the influence of his research on society. On the other hand, the author is genuinely concerned about his own biases, typos, or even errors potentially harming society. Therefore, the author is very eager to continuously revise and improve the book.
Corporate governance issues fall into two categories: agency problems and expropriation problems. The former deals with the relationship between shareholders and managers, while the latter involves conflicts of interest among shareholders. If managerial corruption is not corrected and restrained, the value of the company would plummet, making the modern joint-stock company system impossible. As a result, investors have devised various methods to incentivize and constrain professional managers, leading to the development of many mechanisms to regulate company controllers.