CORPORATE GOVERNANCE

Corporate governance is the study of the distribution of rights and responsibilities among different participants in the corporation, such as, *managers, shareholders, the board of directors and other *stakeholders (e.g. employees, suppliers, and consumers). This area of inquiry is at the heart of economic sociology as it explores the social relations between organizational actors and institutions that often have conflicting interests. The concept of governing, or ruling with authority and control, is not recognized in neoclassical economic studies or in Adam Smith’s invisible hand of the marketplace. Flourishing corporate governance studies have spurred on interdisciplinary research in sociology, economics, law and political science surrounding the relationships between power relations, *financial markets, legal systems, political systems, and product and labour markets. The study of corporate governance, that originally developed in the context of the *agency theory and is based on the premise of shareholder maximization, has been enriched by economic sociologists and other social scientists who develop two new theoretical and empirical dimensions. First, these scholars have strived to shed light to the different stakeholders in the firm and their relationships. Second, historical and comparative studies have questioned the key factors leading to diverse national corporate governance systems around the world. I discuss each of them in turn