Shareholders Harmed by Regulation of Corporate Governance

For Immediate Release. Stakeholder models of corporate governance should be opposed, argues Dr Elaine Sternberg, author of Corporate Governance: Accountability in the Marketplace, the latest paper from the iea.

In this robust and comprehensively free-market defence of Anglo-American systems of corporate governance, the author argues that stakeholder models allow management and governments to run companies in their own interests.

Starting with a clear explanation of what corporate governance is, Sternberg demonstrates why the stakeholder, German and Japanese models are less capable than the Anglo-American model of achieving good corporate governance. She shows how, and why, regulation to improve corporate governance is typically counterproductive.

Properly understood, corporate governance consists of ways of keeping corporate actions, agents and assets tied to the corporate objectives; those objectives are the definitive ends established by the corporation's owners, its shar