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Decision system
Introduction:
The decision system is here defined as
the
system by which corporate decisions are distributed between the
annual shareholder meeting, the board of directors and the management. It also covers
issues in the corporate charter of relevance for the distribution of control,
such as the existence of staggered boards and stocks with differential voting
rights. Such decision systems
are of major importance in corporate governance because their design affects the
incentives of managers and thereby
the economic efficiency of the firm.
Classic references on decision systems are Fama and Jensen [1983a,
1983b].
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